Cryptocurrencies captured strong gains in March and trading volumes almost doubled to an all-time high as the leading coins soared to uncharted territories, prompting a change in the market dynamic.

JPMorgan (JPM) said in a research report that crypto market capitalization jumped 19% in March, indicating continued growth, albeit at a slower pace compared to the previous month. Altcoins outperformed traditional assets like and in terms of market cap growth, yet double-digit growth was seen across the broader ecosystem. 

The DeFi sector also saw an expansion, fueled by an increase in Total Value Locked (TVL) across Ethereum Layer 2 solutions following the mid-month Dencun upgrade.

Trading volumes in March nearly doubled month-over-month, aligning the first quarter of 2024 with the last quarter of 2023’s performance. According to TradingView, the Average Daily Volume (ADV) for the entire crypto market surged by 87% month-over-month. Data from CCData highlighted even more substantial growth, especially in altcoin volumes as trading is picking up steam again.

“The total crypto market capitalization remained above the $2.0tr threshold throughout March and even eclipsed $2.6tr mid-March before settling towards month-end at ~2.5tr as the ecosystem rallied +19% in March,” the report added.

“We saw aggregated volumes, as reported by TradingView, jump more significantly in March. Average daily volumes across the total crypto market cap were up 87% MoM in March and +133% YoY. Unlike February’s slowdown in velocity, it appears that trading velocity picked up meaningfully in March.”

Regulatory landscape in the U.S. remained a focus in March with several key updates. Despite the ongoing lack of clear regulatory guidance, the month featured key regulatory actions and court decisions related to the crypto industry, including actions against Coinbase (NASDAQ:) and other major players. The SEC continued its “regulation by enforcement” approach, engaging with new industry participants and affecting the market dynamics, JPMorgan notes.

The Dencun Upgrade was successfully implemented on March 13 to expand the Ethereum ecosystem’s capacity and reduce transaction fees. The upgrade has already led to a notable decrease in median transaction fees across various Layer 2 solutions, with TVL across the ecosystem growing. For example, TVL on Base, Coinbase’s Layer 2 chain, climbed from $690 million just before the upgrade to over $1.2 billion by early April.

Meanwhile, net flows into spot Bitcoin ETFs remained net positive in March, but slowed to $4.6 billion from February’s $6.1 billion, despite Bitcoin reaching a new all-time high of over $73,000 mid-month. This surge in Bitcoin’s price initially led to increased ETF inflows, but the trend appeared to abate as Bitcoin’s price began to trade sideways after reaching its peak.

Bitcoin mining profitability improved by an estimated 33% in March, JPMorgan highlights. This was driven by a 37% month-over-month increase in the average Bitcoin price, which outpaced the growth in network hashrate. However, profitability is expected to decline in April due to the upcoming halving, which will reduce the block reward from 6.25 to 3.125 Bitcoin.