2020 Q3 Blockchain Industry Research Report
1. Market overview
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Figure 1-1 Market performance
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Source: QKL123
The picture above shows the market trend of Bitcoin since the end of the second quarter, which can be divided into four stages as a whole:
(1) The first stage, direction selection. From June to July 21, a triangle convergent pattern was formed as a whole, the trading volume and volatility decreased simultaneously, and in the middle and early July, it fluctuated within a narrow range from 8970 to 9470 for three weeks, and finally chose to break through with heavy volume , Standing above 11,000 in one fell swoop.
(2) The second stage, order consumption. Since choosing the direction in July, it has successfully stood at 11,000, and has repeatedly oscillated in the range of 11,000-12,000, showing a "head-and-shoulders pattern" as a whole, and forming a neckline around 11,000. During the period, it falsely broke through 12,000 four times. Although it failed to stand up, it successfully consumed orders above 12,000, laying a certain foundation for its later breakthrough of 12,000.
(3) The third stage is callback and consolidation. In early September, BTC collapsed with the DeFi bubble burst and fell below the neckline, but it was still supported above the long-term upward trend line. As the DeFi bubble further burst, funds returned to the market and rose slowly, breaking through the short-term downward trend line one after another And the neckline in the early stage, and oscillate within a narrow range above the neckline to further accumulate strength.
Note: The above analysis does not constitute any investment advice.
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1.2.1 MVRV (Market Value to Realized Value)
Figure 1-2 MVRV
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Source: QKL123
The MVRV indicator is used to assist investors in discovering the deviation of the BTC market value from the realized value. The realized value (the sum of the amount represented by each coin in the network when it last appeared) weakens the impact of the lost part of the BTC on the indicator during the calculation process, and at the same time differentiates the BTC involved in the reserve of coins and trading speculation , which better reflects the average cost of chips. 1 is an important critical value of the MVRV indicator. When MVRV is less than 1, it means that the market value is lower than the realized value, which is a more suitable time to increase investment; when MVRV is higher than 1, it indicates that the average market valuation of speculators is higher than that of holders . The current MVRV indicator value is 2.03, which is far greater than the critical value of 1. The BTC market value deviates from the realized value to a large extent. It is more ambiguous, and the validity of indicators will also be affected to a certain extent.
Figure 1-3 GBTC holdings and Bitcoin price
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Figure 1-4 The premium rate of GBTC share price relative to Bitcoin price
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The picture above shows the BTC-Grayscale Trust’s open interest and OTC premium rate. On the whole, the GBTC open interest continues to rise, and the OTC premium rate and BTC price show a positive correlation. As the currency price rises, the OTC premium rate also rises. At present, Grayscale Bitcoin Trust opens up private placement subscriptions in the primary market from time to time, mainly for qualified investors who meet the requirements of the U.S. Securities Act. The minimum investment threshold is US$50,000, but it does not support share redemption. Trust share, the share cannot be exchanged back to Bitcoin, investors can only sell the Bitcoin trust share GBTC in the US stock secondary market. Based on the special mechanism that the trust cannot be redeemed and its ingenious separation of issuance and circulation across markets, the high premium of GBTC shares in the US stock secondary market provides room for cross-market arbitrage, and arbitrage funds participate in it to successfully achieve "selling pressure" The perfect closed loop of transferring to US stocks and returning funds to the currency circle makes Grayscale Bitcoin Trust a "buying but not selling bull force" in the market. Since the third quarter of 2020, the amount of coins flowing into Grayscale Bitcoin Trust has reached 95,000 BTC (equivalent to about 1.311 billion US dollars at the current BTC price), of which more than 80% of the funds come from institutional investors, and the admission of institutions to a certain extent Promoted the maturity and stability of the market.
2. Ecological analysis
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2.1 Mainstream currency ecology
Figure 2-1 BTC Market Value Proportion
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Source: QKL123, TradingView
The picture above shows the proportion of BTC’s market value in the third quarter. It can be seen that the overall trend is a “U” shape. It began to decline from the short-term market value high of 64.40% in early July to 57.20% on August 31. During this period DeFi liquidity mining is gradually reaching a climax, and the price of DeFi governance tokens is also rising, which in turn squeezes the market value of BTC. After the beginning of September, DeFi projects gradually experienced "thunderstorms", bubbles were gradually digested, and funds returned BTC, and its price pushed up, and its market value continued to rise. OKEx suspended the withdrawal of coins, which also slowed down some selling pressure on the market at a high level to a certain extent.
2.1.2 BTC correlation analysis
Figure 2-2 S&P 500 Index and BTC
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Source: QKL123
The picture above shows the price trend of the S&P 500 index and BTC. It can be seen that the overall trend of the two is roughly the same. Since the outbreak of the new crown epidemic this year, the correlation between BTC and US stocks has increased significantly, and some investors even later regarded the rise and fall of the opening of US stocks as a barometer of the currency market that day. Since March, the correlation between the S&P 500 index and the BTC price trend has reached 0.9245. Since the third quarter, the correlation has declined, but it still reaches 0.7438. The correlation between the US stock index and Bitcoin can be used as a reference, but it cannot be followed blindly .
(2) Correlation analysis between BTC and gold
Figure 2-3 Gold and BTC
Source: QKL123
The picture above shows the price trend of gold and BTC. It can be seen that the price of gold has been rising steadily this year. Compared with BTC, although the overall trend is consistent, the correlation between the rise and fall is not as strong as that of US stocks and BTC. Since March, the correlation between gold and BTC price action can reach 0.8836, and the correlation has also decreased in the third quarter, but also reached 0.7652. Since its birth, Bitcoin has been called "digital gold". Because of its scarcity and other characteristics, it is usually compared with "gold". To a certain extent, it has the same "safe-haven asset" attributes as gold, but its stable Sex is less than gold, and its value comes more from consensus.
Figure 2-4 BTC and ETH
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The picture above shows the price trend of Bitcoin and Ethereum. Both are leaders in the digital currency market. At different stages, the two take the "baton" to lead each other. In the early part of the third quarter, the DeFi ecosystem in the Ethereum ecosystem was in full bloom. Various contract scheduling made Ethereum a short-term rigid demand. A large amount of funds in the venue flowed into the Ethereum ecosystem, and Ethereum also broke through the high point in two years; after September, the DeFi bubble Gradually broke down, funds flowed back to the market, Bitcoin regained the baton and continued to lead the digital currency market forward. The correlation between Bitcoin and Ethereum price action since March can reach 0.9336, and the correlation has decreased in the third quarter, but it is still highly correlated, reaching 0.9064.
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2.2 Stablecoin Ecology
Figure 2-5 The supply of the top five stablecoins in the third quarter
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Source: QKL123
The picture above shows the circulating supply of the top five stablecoins in the third quarter, including USDT, USDC, TUSD, PAX, and DAI, showing a steady upward trend overall. The supply of stablecoins increased by 66.67% from the beginning of July to mid-October Among them, USDT accounts for the highest proportion of the supply of the five stablecoins, stabilizing at around 80%.
Figure 2-6 USDT circulation and BTC price
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The picture above shows the circulating supply of USDT in the third quarter and the trend of BTC. The trend of BTC shows an "arch" as a whole. It can be seen that when BTC fluctuates at a high level, the increase in the circulating supply of USDT is relatively large; BTC is relatively low. When fluctuating, the USDT circulating supply increases slowly. From another perspective, there is a positive correlation between the increment of USDT circulating supply and the price of BTC.
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Figure 2-7 Platform currency market performance
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The picture above shows the performance of the platform currency market in the third quarter, and the overall difference is quite large. Among them, the platform currency with the best market performance is BNB, with an increase of 104.49% in Q3; the platform currency with the worst market performance is OKB, which has dropped by 7.52% compared with the beginning of the third quarter. The reason may be that the OKEx exchange Suspension of currency withdrawals not only resulted in greatly discounted asset withdrawals in the exchange, but also a huge negative for its platform currency; the platform currency FTT of the derivatives exchange FTX performed well, rising steadily by 39.42%; Huobi’s platform currency HT In the third quarter, there was not much fluctuation, and there was no bad news or good news that could promote the independent market, and it has been fluctuating within a narrow range within a small range.
3. Exchange Overview
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3.1 Major Events of the Exchange
(1) July
① On July 3, Binance and Indonesian exchange Tokocrypto launched the Indonesian rupiah stablecoin BIDR;
② On July 7, Binance announced today that it has completed the acquisition of Swipe. Swipe is an industry-leading digital wallet that supports multiple assets and a platform that supports Visa card payments. In the future, the two parties will open up channels for legal currency assets and digital assets;
③ On July 7, Coinage became a licensed exchange approved by the Japan Financial Services Agency. Currently, there are 24 licensed exchanges officially announced by the Japan Financial Services Agency;
④ On July 16, OKCoin launched the OKCoin Oracle (price oracle), a price feed that uses data signatures from the OKCoin cryptocurrency exchange to broadcast secure data about the prices of different digital assets;
⑤ On July 23, QBTC Exchange: Cooperating with relevant departments to formulate a withdrawal plan, closing currency transactions and OTC transactions;
⑥ On July 24, 100x, the venture capital institution of HDR Global Trading, the parent company of BitMEX, invested in VALR, the largest bitcoin exchange in South Africa;
⑦ On July 25, Visa worked closely with licensed and regulated digital currency platforms such as Coinbase and Fold, and has built a bridge between digital currency and Visa's existing global network of 61 million merchants;
⑧ On July 29, Binance launched Binance Australia, a fiat-to-crypto asset trading platform;
⑨ On July 30, the token platform CoinList launched CoinList Pro, an exchange for institutional traders.
(2) August
① On August 4, Binance launched a series of coin-based margin perpetual contracts and quarterly delivery contracts;
② On August 18, Coinbase released the ERC-20 Standard Token Security Review Guidelines;
③ On August 20, OKCoin Japan launched spot trading services, and the first batch of 4 digital assets including BTC were launched;
④ On August 23, Huobi Global will set up a "global observation area" and launch the first batch of projects YFII and YFI;
⑤ On August 27, Binance launched an industry collaboration plan – the CryptoSafe Alliance (CryptoSafe Alliance) to combat fraud using blockchain and encrypted assets, and further strengthen the security defense against malicious actors in the encrypted asset field;
⑥ On August 31, Coinbase CEO Brian Armstrong said that Coinbase Launch may be launched to help crypto startups create smart contracts, launch crypto projects and help with project management;
(3) September
① On September 1, Binance Smart Chain was officially launched;
② On September 3, Jump Trading, one of Chicago's well-known high-frequency trading companies, invested in FTX's decentralized exchange Serum and provided it with liquidity;
③ On September 8, Bitfinex invested in LN Markets, a bitcoin derivatives trading platform;
④ On September 16, Kraken became the first cryptocurrency exchange to obtain a banking license (SPDI);
⑤ On September 21, BitMEX tested the Bitcoin satellite system, which can run nodes through satellites without the Internet;
⑥ On September 27, KuCoin was attacked by a large-scale hacker, and 150 million US dollars worth of cryptocurrency was stolen. Afterwards, several platforms jointly froze the stolen funds and recovered part of the funds;
⑦ On September 28, the next-month contract was added to the OKEx options contract;
⑧ On September 29, Binance launched the decentralized stablecoin system "Venus" based on the Binance Smart Chain;
(4) October
① On October 8, Coinbase, Dragonfly Capital and Huobi invested in the decentralized exchange CoFiX;
② On October 13, BitMEX Research: Bitcoin storage technology Brainwallet is not safe;
④ On October 21, DragonEx suspended the recharge and withdrawal services of all currencies on the platform. Due to the impact of the OKEx incident, a large number of users had a crisis of trust in the centralized exchange, which led to a run on the platform, and the level of platform reserves deteriorated rapidly;
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Figure 3-1 Spot Market Overview
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Source: QKL123
Figure 3-2 Futures Market Overview
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The picture above shows an overview of the futures market in the third quarter, covering five major derivatives exchanges, including Binance, Huobi, OKEx, Bitmex and Bybit. It can be seen that the overall trend of the futures trading volume of the five major futures exchanges is basically the same, and the futures trading volume of Bitmex and Bybit is significantly lower than that of the other three exchanges. Huobi surpasses.
4. Cryptocurrency exchanges
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4.1 Spot Exchange
Figure 4-1 Overview of spot exchanges
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Source: QKL123
The figure above shows the overall trading volume and proportion of the top ten spot exchanges in the third quarter. In the third quarter, the average trading volume of the top ten spot exchanges was 86.746 billion US dollars, and only the top three exchanges exceeded the average trading volume, namely Binance, Huobi and OKEx, and their spot trading volumes were 338.372 billion and 190.687 billion respectively and 177.302 billion US dollars. In the third quarter, the trading volume of the top ten spot exchanges accounted for 39.01%, 21.98% and 20.44% respectively, and the remaining seven spot exchanges accounted for a total of 18.57%. The information on the proportion of spot trading volume reflects that in the spot market, users of leading exchanges are highly concentrated.
Figure 4-2 Trend of spot trading volume
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The picture above shows the trend of spot trading volume in the third quarter, showing a bimodal trend as a whole. When the BTC price rises rapidly or suddenly falls, there will be huge transactions. To a certain extent, it also shows that the support of the BTC price in a certain range is based on heavy buying. The same is true for the decline. This reflects that BTC may have certain manipulation risks. At the same time, in the middle and early stages of the third quarter, the trading volume of the spot market was greatly affected by DeFi. In the early stage, DeFi liquidity mining projects followed one after another, and the high yield of mining drove the demand for spot purchases; Withdrawing coins and smashing orders all have a greater impact on the spot trading volume.
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4.2 Futures Exchange
Figure 4-3 Overview of futures exchanges
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Source: QKL123
The figure above shows the overall trading volume and proportion information of the five major futures exchanges in the third quarter. In the third quarter, the average trading volume of the five major futures exchanges was 329.284 billion US dollars, and only the top three futures trading volumes exceeded the average, namely Binance, OKEx and Huobi, whose futures trading volumes were 515.658 billion and 443.185 billion respectively and 385.927 billion US dollars, accounting for 31.32%, 26.92% and 23.24% of the trading volume of the five major futures exchanges in the third quarter, and the remaining two futures exchanges accounted for 18.32% in total. The same information is reflected in the spot market, and the users of leading futures exchanges are highly concentrated.
Figure 4-4 Futures Trading Volume Trend
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Source: QKL123
The picture above shows the trend of futures trading volume in the third quarter. The overall trend is multi-peaked, and the steepness is stronger than the peak of the spot market trading volume. The day with the largest futures trading volume is about 9 times that of the least day. When the market is coming, investors are more inclined to trade in the futures market and increase capital leverage to obtain high returns, but at the same time, the opposite of high returns is high risk. When some investors obtain high returns, some investors face huge losses and Being forced to liquidate positions, which in turn drove up the trading volume of the futures trading market during extreme market conditions.
Figure 4-5 Futures open interest
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Figure 4-6 Futures Liquidation Amount
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Source: QKL123
