According to Cointelegraph Research, the crypto market experienced a negative 6.98% loss in May, the first monthly loss since December 2022. However, the report indicates that this was not due to any change in fundamentals or macroeconomic factors. Many indicators, such as VC investment and futures markets, show an optimistic underlying sentiment. While traditional markets and tech stocks continued their rally in May, the crypto market remained suppressed for some time before bouncing back.
The report also highlights that mining operations and established ventures saw gains in May, with mining stocks rallying. The VC investment for the crypto sector surpassed one billion dollars for the first time since September 2022, rising by 34% from April, and recording 81 deals. This marks the third consecutive uptick in VC investment, but it is unclear if this means activity will rise sustainably from bear market levels.
The report also notes that Bitcoin’s network activity has been the strongest of the bear market, with the recently hyped-up Ordinals protocol experiencing significant fee spikes, benefiting miners. While it remains to be seen if fee revenues will fade back into insignificance within the greater context of mining economics, the mining section of the report provides a monthly round-up of quantitative mining metrics and will monitor this development closely.
In conclusion, the report suggests that despite the monthly loss, the crypto market’s fundamentals remain strong, and several trends, such as VC investment, mining operations, and the Bitcoin network’s activity, indicate an optimistic sentiment in the sector.