The September 2018 downturn in the cryptocurrency market has been attributed to a variety of factors, including moves from China and South Korea. With global strategists seeing more investments into blockchain development for both finance and gaming, how will the crypto market fare going forward?

The “crypto regulations 2021” is a new policy that was introduced in September. The policy will be in place for the next 10 years.

How did the crypto market change in September with the introduction of national policies? |

Because of the influence of national legislation in various countries, mainstream cryptocurrency prices declined in May, and the industry’s Total Value Locked (TVL) dipped below $90 billion. Following the mid-year selloff, the crypto market faced an even more difficult regulatory challenge in September, with numerous governments moving in to implement different laws. 

This Footprint dashboard visualizes the most essential facts from the previous month.

How did the crypto market change in September with the introduction of national policies? |BTC and ETH prices (Data source: Footprint Analytics)

As a result of the new rules, the prices of BTC and ETH have remained constant.

Except for stablecoins, the price of BTC and ETH has a significant impact on all tokens.  

According to the data in the graphic, the implementation of the relevant laws in September did not have the same influence on BTC and ETH values as it did in May (BTC went from $58,000 to $35,000 and ETH fell from $4,200 to $2,000), with BTC remaining over $40,000 and ETH remaining above $3,000. The value of the currencies remained steady, while the broader cryptocurrency market remained stable.

How did the crypto market change in September with the introduction of national policies? |Changes in TVL on a daily basis (Data source: Footprint Analytics)

At the end of September, DeFi had a TVL of $182.2 billion, up 7.2 percent from the previous month.

In comparison to August, TVL in September was strong, reaching $190 billion at the start of the month, a year-high. Although TVL fell to varied degrees in mid and late September, even going below $170 billion, the magnitude and length of the effect were significantly less than the impact of the policy change in May.

The cryptocurrency market remained stable, with investors avoiding panic.

How did the crypto market change in September with the introduction of national policies? |TVL’s market share for various chains is compared (Data source: Footprint Analytics)

Older blockchains are taking their time to grow, while new ones are popping up all the time.

Emerging blockchains steadily lowered the TVL and market share of TVL for Ethereum and Binance Smart Chain in September, according to Footprint data.

Emerging blockchains, on the other hand, are gaining traction. Solana, for example, was rated 5th in blockchains in August with $3.33 billion TVL and was already 3rd in September with $9.79 billion (by mid-September, this chain had topped $12 billion). 

Avalanche is also performing well, placing 6th on the public chain with $3.68 billion.

Terra, which is located in Korea, had significant setbacks in September as a result of Korea’s strategy to shut down two-thirds of cryptocurrency exchanges, reducing it from third to fourth place overall in the blockchain rankings, with its TVL rising by just 14.1 percent. Solana increased 193.9 percent and Avalanche rose 74.41 percent, respectively.

How did the crypto market change in September with the introduction of national policies? |For chains, the top 5 TVL growth rates (Data source: Footprint Analytics)

As a result of their fast expansion, new blockchains offer potential.

Arbitrum, which is part of Layer2, has the greatest TVL growth rate. Arbitrum has drawn an inflow of cash and project owners because to its reduced transaction costs and quicker transaction times when compared to Ethereum (Curve and SushiSwap are now online). It not only outperformed the growth pace of many blockchains, but also shone out among the numerous Layer2 initiatives, with a growth rate of 856,323.64% (TVL from a little over $100,000 to $1.3 billion).

It was followed by OKExChain, which took advantage of the chance to build an infrastructure favorable to the development of GameFi by launching the GameFi Hackathon, which attracted a large number of projects to go live on the chain and saw a growth rate of 3,470.16 percent in September.

With $220 million in the same month, Moonriver came in third with a growth rate of 2,195.26 percent. It combines the Polkadot ecosystem’s cross-chain benefits with Layer1’s robust compatibility, giving developers and consumers a better experience.

How did the crypto market change in September with the introduction of national policies? |TVL’s market share in several categories is compared (Data source: Footprint Analytics)

DeFi’s headlines are still dominated by DEX, Lending, and Yield.

DEX, loan, and yield were the top three DeFi market share categories in August. With 30.55 percent of the vote, DEX is in first position, despite a 0.34 percent drop in share from the previous month. However, since big centralized exchanges like Binance and Huobi have been impacted by restrictive legislation in some countries, more trading volume and money have poured into DEXs, resulting in a $3.61 billion increase in the TVL of this category.

The drop in token values, on the other hand, has had an impact on the lending sector. It not only reduced the amount of funds involved in the lending business, but it also increased the risk of liquidation of the originally borrowed funds, resulting in a decrease in the TVL of the lending category compared to August, and while it still maintains second place, its market share has decreased by 2.63 percent.

Yield came in third place, with a TVL of $30.34 billion, representing 16.65% of the market share and the biggest TVL growth of any category, with a rise of 18.74 percent over the previous month. Convex Finance ($7.93 billion) and Yearn Finance ($4.69 billion) were the two largest donors.

Summary

The effect of government rules on the crypto market in September was minimal. The crypto market had a certain immunity to policy changes after substantial turbulence in May, and it continued to grow with excellent resilience and tension. 

Emerging blockchains are gaining traction, and those that have already made a name for themselves are anticipated to soar to new heights next month, while others that have yet to appear will sprout one by one. Congestion will become more significant for existing blockchains that are sluggish to grow as their carrying capacity rises, and their position will progressively be surpassed by developing blockchains.

A look back at September’s policy events:

  1. 1Inch, a DEX aggregator, has begun limiting access to US consumers in order to prepare for the introduction of 1inch Pro, a compliance solution (30th Sep)
  2. China has issued a notice governing virtual currency “trading speculation” (24th Sep)
  3. SBI, India’s biggest bank, has prohibited crypto exchanges from utilizing its Unified Payments Interface (UPI) to receive payments. (15th September)
  4. Banks are being advised by Russia’s central bank to disable cards and wallets used to transact with cryptocurrency exchanges (15th Sep)
  5. In September, two-thirds of Korea’s cryptocurrency exchanges will collapse (13rd Sep)
  6. The Monetary Authority of Singapore (MAS) has added Binance.com to its investor warning list (1st Sep)

Footprint Analytics provided the content for this guest post.

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How did the crypto market change in September with the introduction of national policies? |

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The “china bans bitcoin 2020” is a statement made by the Chinese government. China has implemented new policies that ban cryptocurrency trading and mining, which has caused the crypto market to change in September.

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