Blockchain Snapshot | April 2023

Introducing "Blockchain Snapshot" by FD CAPITAL , our newly launched rubric dedicated to reviewing the performance of companies on our watchlist and providing valuable insights into the latest industry trends. Join us every second Monday of the month as we kick off by sharing the noteworthy outcomes from the month of April.

In April, Bitcoin experienced a momentous price movement by breaching the key resistance level of US$30k, a level that had not been reached since June 10, 2022. This breakthrough generated anticipation among market participants, hinting at a potential reversal in the market sentiment.

Meanwhile, Bitwise CIO Matthew Hougan observes that crypto's correlation to the stock market has dropped in April and predicts this trend will continue in May. Hougan also believes that crypto is in a new bull market cycle that typically leads to all-time highs.

In April, the SEC and other regulators?continued to crack down on the cryptocurrency industry, as evidenced by the SEC's proposal to amend the definition of "exchange" to include crypto assets, and Coinbase plan to expand into international markets while considering relocating if regulators don't provide clarity on compliance with securities laws.

As First Republic faces a potential banking crisis, government officials and financial sector leaders are working to develop a rescue plan, which may fuel renewed concerns about the banking sector and act as a significant driver for crypto prices in May.

Following the implementation of the highly anticipated?Shanghai upgrade?on Ethereum on April 12, the crypto markets experienced a robust surge. With validators now able to withdraw staked ETH from the Beacon Chain for the first time, the upgrade marks a significant milestone for the Ethereum network and for the L1/L2 sentiment in general.

Optimistic rollups currently dominate the Layer 2 market, with Arbitrum and Optimism Foundation leading the way. In terms of Total Value Locked (TVL), the two networks alone exceed the combined liquidity of all other Layer 2 solutions, reaching billions.

Arbitrum , a Layer 2, has?airdropped?US$120M in ARB tokens to ecosystem projects. The projects will be able to decide how to deal with their share of the airdrop.

Sui Foundation , a Layer 1, that will go live on mainnet in early May, has launched the Sui Developer Portal. This is a one-stop hub for Sui’s technical and educational resources, as well as core dev tooling and infrastructure.

Polygon Labs has?partnered?with Google Cloud to grow its ecosystem. Google Cloud will add support for Polygon to its Blockchain Node Engine, which allows developers to access and use blockchains on Google’s servers.

While venture capital firms invested?the lowest amount since 2020, at US$2.4Bn, into crypto-focused companies in Q1 2023, the number of deals has increased, driven mostly by pre-seed deals, offering some optimism in the sector.

Among the chains we are following, the biggest gainers in terms of market cap during April 2023 were Binance Chain, TRON and Arbitrum One, which faced a 2.95%, 2.04% and 1.91% increase respectively. The evidence of such growth of Arbitrum One may be found in its latest?performance report, showing it processed over 1.26 million transactions in a last week of April, surpassing Ethereum's 0.93 million.

The Polygon network's activity has been declining recently, which lead to 12.06% decline in market cap over April 2023. This may be attributed to the fact that many dApps on the platform have experienced?decreased activity?in the past weeks. Although Polygon added y00ts and DeGods NFTs to its network, it failed to retain users' interest in the NFT space as well.

Overall, in April, the sentiment in the crypto market remained bearish, primarily due to concerns surrounding the U.S. economic outlook and the banking crisis. It is expected that this trend will continue into May.