Assumptions:

1. We assume that the holiday period to be from 1st December to 6th January. Thus the time period taken for analysis is from 1 Nov 22 to 7 Jan 23 for comparison.
2. We define new wallets as the day in which it made its first transaction.
3. To keep things straighforward, we will define a new wallet that changes it's native token balance from non-zero --> zero to mean that they have 'cashed out' from their newfound holiday wealth. Rationale is that not leaving any native token for gas means the User has no intention to use this wallet for future transactions.

Metrics Used:

1. New Daily Active Wallets (Ethereum Mainnet & Polygon)
2. New Daily Active Wallets that are cashed-out (Ethereum Mainnet)
3. NFT Volume (USD) (Ethereum Mainnet)
4. Price Chart for BTC, ETH, Matic
5. Macro Situation (Inflation Rate, Interest Rate,S&P500, NASDAQ)

New Daily Active Wallets

We expected to see a relative increase in new daily active wallets during the holiday period for both Ethereum Mainnet and Polygon. However based on the New Active Wallets Chart, there was a decrease in new daily active wallets for Polygon and Ethereum Mainnet remained muted, possibly due to people wanting to 'disconnect' and spend quality time with loved ones during the holidays. Further analysis can be done on the anomaly of 9th Dec where a spike of more than 1 million new daily active wallets was recorded on Ethereum Mainnet.

New Wallets Cashing Out

Zooming in to Ethereum Mainnet, a slight uptick of new daily active wallets was observed around 24th Nov (Thanksgiving) and 25th Dec (Christmas). It could be that current users gave new wallets loaded with native token ETH as gifts to loved one in an effort to onboard new users to the ecosystem. However, from the 'Ration of New Wallets Cashing Out' graph, a similar uptick in new wallets cashing out during that period could mean that these 'gift wallets' contents were being emptied and converted to fiat money instead. More time is required for deeper analysis to confirm if this was the case.

Price Charts

With both charts above showing BTC, ETH and Matic prices falling from the highs at the start of the year in January to the stagnant lows at year end, it looks like the overall bearish sentiment for the Crypto Ecosystem at large is still dominant and should continue into the start of 2023:

• BTC: $47k -> $16.8k
• ETH: $3.7k -> $1.2k
• Matic: $2.54 -> $0.86

NFT Volume (USD) on Ethereum Mainnet

NFT Volume 7-day moving average had a sustained upswing in the month of December 2022 compared to the entire 4th quarter. A deeper analysis would be required to see if it was new NFT buyers adding to the volume or wash-trading by existing participants.

Macro Indicators (Inflation Rate, Interest Rate, NASDAQ, S&P500)

We use macro data on US markets and economy as they are one of the central players in global markets.

• With the spike in inflation since mid-2021, the Federal Reserve’s FOMC has aggressively increased effective interest rates since the start of 2022 in an attempt to cool markets and the economy.
• This has made the cost of borrowing money increase substantially and risk-assets -- eg. NASDAQ, S&P500, Crypto -- valuations has taken a beating in 2022.

Conclusion

• We did a glance at the metrics above to get an idea if there was a substantial spike in activity, adoption, asset accumulation during the end of year holiday period in 2022.
• Based on the metrics discussed, no meaningful increase in metrics would have us believe that the narrative in crypto have ‘broke out’ from the broader macroeconomic climate. However we do see metrics substantially improving in the 1st week of Jan 2023, which could be a signal that a pivot in the bearishness could be around the corner. More time and analysis would be required for more meaningful answers.
• Nonetheless we believe that inflation, interest rates and global money supply are the metrics that will be the forward indicators to any significant changes in the crypto market for the foreseeable future.