Over $1 Billion Poured into Crypto Investments in May, Report Reveals

KuCoin’s research division has released data indicating that the cryptocurrency market secured investments surpassing $1 billion in May. 

Although this marks a substantial inflow, it represents a minor downturn from the previous month’s figures.

Vibrant market activity despite fluctuations

KuCoin Research highlighted that the crypto industry witnessed 156 publicly disclosed investments totaling $1.02 billion in May. This investment volume signifies a 10.61% year-over-year increase from May 2023 yet shows a 6.4% decrease from April 2023’s totals. 

The report pointed to various market drivers, including the SEC’s unexpected nod to a Spot Ethereum ETF, which significantly bolsters market confidence. Additionally, a strong performance in the U.S. stock market and a surge in meme stocks were critical in the robust recovery of cryptocurrency assets during the month.

Mixed results in stablecoin performance

Stablecoins experienced varied fortunes throughout May. The overall issuance of major fiat-collateralized stablecoins, such as USDC and FDUSD, saw declines, whereas USDe achieved a new issuance peak. 

According to data from SosoValue, the combined issuance of six primary stablecoins dropped by $840 million. Conversely, Glassnode data indicates positive momentum for USDT and PYUSD, with PYUSD expanding its market presence from $327 million at the end of April to $398 million by the end of May, marking a 21.7% increase. 

The report also noted PYUSD’s new issuance on the Solana blockchain aimed at retail payments, which could potentially influence Solana’s broader ecosystem involving developers and users. By month-end, USDe’s issuance had escalated to $2.978 billion, narrowly missing the $3 billion threshold but overtaking FDUSD to rank as the fourth largest stablecoin.

Contrasting dynamics in layer-2 and public chains

The landscape for public chains and Layer-2 ecosystems revealed stark contrasts. Despite an uptick in Ethereum prices, its Layer-2 networks did not witness a proportional increase in activity. In contrast, networks like Base and Linea saw sustained inflows and performed well. The report suggests that the allure of high-performance public chains and lower on-chain fees has diminished somewhat, failing to attract new participants at earlier rates.

Bitcoin-related projects, such as BRC20, showed weakness, while assets like Runes led in trading volumes. The market valuation of DOG impressively surged, exceeding $800 million by the close of May. The report also touched on increased vigilance against sybil attacks within large projects, with LayerZero Labs promoting a new initiative for users to report such activities in exchange for rewards. Additionally, crypto gaming and ‘Tap to Earn’ models demonstrated strong appeal within the TON ecosystem, resonating well with market participants.

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