Market analysis

The State of Crypto Report: November 2023 edition

7 min read

November lived up to its reputation as a volatile month as crypto prices see-sawed on the back of the shock Binance announcement. However, it didn’t take long for the market to recover again, with leading digital assets enjoying double-digital returns by the end of the month. In our monthly State of Crypto Report, we review November’s top headlines and how they affected the cryptocurrency market.

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Compared to October, November saw more volatility as investors digested the news of Binance CEO Changpeng “CZ” Zhao’s resignation. The excitement building around the potential bitcoin spot ETF approval also dissipated somewhat, after yet another delay of the SEC’s decision. 

Despite these setbacks, however, the market continued its relentless rise, with most tokens posting double-digit returns and the total crypto market capitalization hitting $1.5 trillion. Bitcoin is up around 10% during November, trading close to the $38,000 mark, while ether rose 14.4%, trading at around $2,085 at the time of writing.

🫣 The bad: Binance shock and regulatory woes

The headline that shook the crypto market in November was undoubtedly CZ’s admittance of guilt in violating the Bank Secrecy Act and Binance’s agreement to pay a $4.3 billion settlement to the SEC for breaking sanctions and money-transmitting laws. The news briefly sent bitcoin down towards the $35,000 mark, while ether also slid below $2,000. However, even the growing concerns over regulation weren’t enough to derail the market rally and assets quickly recovered their upward momentum.

Upon reflection, many market participants felt that the move wasn’t so bad for the crypto sphere after all, since it would ultimately promote competition and create a more level playing field. Indeed, Binance’s US-based competitor Coinbase appears to be one of the beneficiaries, with its shares recently hitting an 18-month high, up 175% over the year to 30 November. 

However, concerns over increasing regulatory scrutiny remain. Kraken is back on the chopping block again, after a $30 million SEC settlement earlier in the year, while footballer Cristiano Ronaldo is facing a $1 billion lawsuit in the US over his promotion of Binance NFTs. The month also saw PayPal receive an SEC subpoena regarding its recently launched PYUSD stablecoin, while the CFTC issued a subpoena to Coinbase related to the Bybit case. 

It wasn’t all about regulation, though. Decentralized finance (DeFi) protocol KyberSwap suffered an attack it called “one of the most sophisticated in the history of DeFi”, which resulted in the loss of approximately $54.7 million in crypto assets. The protocol recovered a small portion of this, but the incident once again highlights the lack of security and guardrails in the DeFi space.

😀 The good: Bullish signs and macro tailwinds

Yet, like in October, the good news outweighed the bad and sentiment reflected this. Bullish sentiment solidified throughout the month, with Standard Chartered maintaining its $100,000 bitcoin price forecast by 2024 year-end, while MicroStrategy doubled down on its bitcoin investment with another $600 million purchase. Meanwhile, BlackRock applied for a spot Ethereum ETF in the US, underscoring its commitment to the crypto space.

The stablecoin market, as well as the DeFi and NFT spaces, showed signs of recovery, with decentralized exchange (DEX) trading volumes recording a healthy 32% rise during October. Digital asset investment products also enjoyed the strongest inflows since 2021.

On the macro front, the crypto community reacted positively to the news that a pro-bitcoin candidate, Javier Milei, had won the Argentinian presidency. Milei has promised to close the country’s Central Bank and may even consider adopting bitcoin as legal tender, according to reports. 

Over in the US, slowing inflation and a cooling labor market suggest the interest-rate hiking cycle may be finally coming to an end. During a recent speech, Federal Reserve Governor Chris Weller’s comments that “something appears to be giving, and it’s the pace of the economy” appeared to further reassure investors that the central bank is done hiking. This also helped push risk assets higher.

📊 November altcoin review

AVAX – the native token of the Avalanche blockchain – was by far the strongest performer in November, shooting the lights out with a 95.4% return. Now trading at around $22, AVAX was buoyed by several hard-hitting partnership announcements in recent weeks. The involvement of the blockchain in the Monetary Authority of Singapore's Project Guardian, which is testing the benefits of tokenization for traditional finance, also helped propel its token higher. 

READ: What’s behind the AVAX rally?

The Solana blockchain continued to enjoy a strong recovery after an “annus horribilis” following the collapse of FTX. Its native SOL token rose 56.4% in November to trade at around $60, marking a 333% return over the last year.

READ: Solana’s renaissance: How sustainable is the SOL rally?

BNB was a notable outlier, though its value remained relatively resilient despite the Binance news. It is trading 1% higher at the end of November but is down 23% over the past year. After an incredibly strong month that saw its value skyrocket by 68%, XRP’s performance was also more subdued in November, with the token posting a 2% monthly gain. 

READ: XRP’s revival: Is the sleeping giant finally stirring? 

ATOM (Cosmos), DOT (Polkadot), LINK (Chainlink), and MATIC (Polygon) all recorded double-digit gains in November. Click on the links to learn more about each asset and check out the blog below for more on how to earn a yield on MATIC, SOL, DOT, ATOM, XRP and LINK.

LEARN: How to earn on MATIC, SOL, DOT, ATOM, XRP & LINK with Yield App

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🍂 December outlook

The last few days of the year are often known for bringing about a so-called “Santa rally” – a sustained increase in stock market prices. This is typically driven by a mix of factors, including holiday spending, tax considerations, and end-of-year bonuses. In the past, cryptocurrencies have sometimes followed a similar seasonal trading pattern to traditional markets, but with less consistency and predictability.

Whether bitcoin and other digital assets experience a surge in the final days of 2023 will depend on a number of factors. These include the Fed’s December interest rate decision, the SEC’s stance on the spot bitcoin ETF, and regulatory updates around ongoing cases, as well as a general outlook for the global economy in 2024.

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