The second quarter of 2023 presented a mixed bag for the crypto market, following a robust Q1. The MarketVectorTM Digital Assets 100 Index (MVDA), representing over 90% of the crypto market cap, saw a modest decrease of 0.5%. However, Bitcoin and crypto stocks outperformed this benchmark, with gains of 6.9% and 46.8 %. 

The MVDA's performance can be attributed to significant regulatory actions against large-cap alt tokens and positive developments for large cryptocurrencies. This resulted in a market split favoring coins, which are not meant to be securities. 

In terms of sectors, those containing major crypto tokens (Smart Contract Platforms) outperformed smaller cap sectors (DeFi, Media Entertainment). April and May were relatively quiet months, with the market trading within a range established post the Silicon Valley Bank collapse in March. This period also saw the lowest volatility quarter for Bitcoin and other sectors in the past two years. 

June saw the market lows tested by regulatory announcements and highs tested with the filing of a Bitcoin spot ETF. This event increased demand for Bitcoin, positively impacting the MVDA 100 index. The positive development for Bitcoin, coupled with regulatory action against certain exchanges for allegedly listing specific altcoins as unregistered securities, led to an increase in Bitcoin's market cap dominance, a level not seen since 2021. 

The recent flurry of Bitcoin Spot ETF filings and newer institutional exchange offerings could potentially revitalize interest in the market, bringing new focus and attention to the asset class. Especially the strong performance of crypto stocks indicates, that a lot of investors who are not allowed to buy crypto directly might be positioning for higher Bitcoin prices.

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