Cryptocurrency Market Contraction Continues into Second Half
Binance Research released a report detailing the state of the cryptocurrency market in the first half of 2026. The report found that the market experienced a broad contraction, with on-chain activity declining rather than a rotation of capital among sectors.
The total value of locked assets in decentralized finance (DeFi) decreased by $43.4 billion, or 38 percent, from January to June. This decline is attributed to the shrinking of the total market capitalization of six major layer-1 blockchains, which fell by $246.5 billion, or 42 percent.
Ethereum also saw significant shifts in institutional asset allocation. The amount of Ethereum held by spot Ethereum ETFs decreased to 5.2 million ETH, while digital asset treasury companies increased their holdings to 7.7 million ETH.
User activity on Layer 2 networks declined dramatically, with a 77 percent decrease between January and June. Solana network revenue also fell by 64.5 percent during the same period.