The third quarter went by, and it ended like it had started: with China banning crypto.
Back in the second quarter, the Chinese ban on mining and exchanging activities led to the Great Chinese Migration and a downward pricing trend that even looked at times like a bear market. Fundamentals and on-chain metrics finally prevailed: back then, the price was going down while all cohorts of buyers made purchases and got ready to HODL. It took almost a month for the numbers to react to the behaviors. It wasn't until late July that we started riding a new positive curve, only interrupted by the end of September by a few incidents that caused a temporary hiatus in the optimistic general feeling: an unexpected oversized liquidation in the futures market, another ban from crypto, and Gary Gensler, chairman of the Securities and Exchange Committee, picking fights with Coinbase, Uniswap, and expressing his discontent with securities and DeFi.
- Q3 was the quarter of the infrastructure bill: the time when the Biden administration threatened to tax crypto in a misguided way that could hamper innovation in the US, and when the crypto community responded with unexpected political power.
- It was the quarter of EIP-1559: the Ethereum upgrade that gave deflationary powers to the protocol, responsible for obliterating $1.6B in ETH and making the remaining supply proportionally more valuable.
- It was NFT summer, with the most popular NFTs making record-breaking sales, making it to the hands of celebrities and mainstream media headlines, and starting to flirt with DeFi.
- And it was the time for scalability to take center stage: Layer 1 and Layer 2 solutions started gaining momentum. Solana, Avalanche, Optimism, or Arbitrum began to deliver their promise of relieving Ethereum from some of its burden (some say speeding it up, others say competing or even killing it).
Q3 ended up with crypto losing some traction due to off-chain news. But on-chain, things have remained jolly. Bitcoin, NFTs, DeFi, Ethereum, and its contenders, seem unstoppable and headed for a very positive Q4.