Looking at the Q1 digital currency market performance from various data

Editor's Note: This article comes fromCrypto Valley Live (ID: cryptovalley)Editor's Note: This article comes from

, Author: Messari, translation: Ziming, reprinted by Odaily with authorization.

stable currency

The first quarter of 2020 was the most active quarter in the history of the digital currency market. The year began with a bullish market, digital assets hit highs, and indicators such as the value locked in DeFi also hit record highs, but by March global economic concerns had spread to the digital currency market, and led to the eventual March 12 There was a massive sell-off. All narratives and infrastructure were put to the test in March. Now that we are about to enter the second quarter of this year, our research team has highlighted several of the most important core points and trends in the future space.

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stable currency

Stablecoins experienced explosive growth in the first quarter of 2020, driven by a global flight to safety and demand for U.S. dollars, with a total market capitalization of more than $8 billion in the quarter. In fact, demand for stablecoins is so strong that more value flowed into the industry in the first quarter of 2020 than in all of 2019. Most of the funds flowed to Tether (the currently dominant stablecoin in the market), and other stablecoins like USDC have also begun to grow significantly in size.

While volatility in the market has seen a lot of money flow into stablecoins, it has been a headwind for Dai, the largest decentralized stablecoin. On March 12, 2020 (now known as Black Thursday), the price of ETH plummeted by 44%, and there was still a funding gap of $4 million in the Maker system due to the liquidation of the vault.

digital currency

Overall, the first quarter of 2020 has been bullish for stablecoins, and their current market capitalization growth rate is four times higher than the previous level. This could bring a ton of new liquidity to ethereum’s ecosystem, further cementing its dominance as a platform for stablecoin issuance.

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digital currency

The digital currency market also started 2020 on a bullish note (BTC rose 45% to a high of $10,362 at the beginning of the year). But the bull market was quickly replaced by market fear, and the impact of the new crown virus began to make waves in the global economy, impacting traditional financial markets and digital currency markets.

There is a saying that is good: sometimes decades pass, the world is still calm, but a new era may have opened in just a few weeks.

open finance

While the macro picture for 2020 is still unclear, many digital currencies such as BTC, BCH, BSV, and Zcash are approaching their halving periods, which may indeed be a development opportunity for their fundamentals, but or We may also see a collapse of some popular rhetoric.

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open finance

As digital currency volatility rose in the first quarter, decentralized exchanges (DEXs) benefited from increased market volume. A cap-weighted index of top DEX projects returned 20.5% in a market where many assets ended the quarter down.

Open Finance is still experimental, but its related technologies continue to develop at a rapid pace. With many projects scheduled to undergo major upgrades in the second quarter of 2020, these changes could have a major impact on the industry as a whole.

smart contract

smart contract

Like other industries, smart contracts have been fully impacted by macro events. Despite the rapid decline in digital asset prices in March, many large-scale projects such as Ethereum and Tezos ended the quarter with positive returns.

The gains were mostly concentrated in the first few months of the year, with Ethereum falling 44% on Black Thursday."ethereum killer"The real story in the space is Ethereum and the so-called

There is an ongoing war between the two, who are looking to launch or have already launched competing smart contract platforms. Numerous projects have raised significant amounts of money and pledged to build a "better" version of "Ethereum".

As these new projects launch, they are likely to compete with Ethereum in areas where Ethereum 2.0 does not (the launch of Ethereum 2.0 is approaching). Ethereum 2.0 will include a series of changes, starting with its transition to a proof-of-stake (PoS) model, which will bring it more in line with newer networks like Tezos and Cosmos.

Staking will also be a prominent theme in the next quarter as more exchanges and custodians (and even funds) start adding or strengthening their staking platforms. If the currency risk begins to outweigh the yield of staking, retail investors and small-scale validator services may face liquidation options, and well-funded validators (those with income sources outside of staking services, such as exchanges, etc.) will Have greater control over these networks.

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