Weekly Market Review: DeFi on Ethereum 2.0
Summary
There is a saying: Usually the market will perform better at the end of the year, because the good news may be released during this time. Is this really the case? This week, the stellar performance of the digital asset market has provided some support for this view. The Ethereum 2.0 beacon chain launched on December 1st, and DeFi projects are busy merging: yearn.finance has announced 5 mergers and acquisitions in the past few weeks. We are witnessing the prosperity and maturity of the still young digital asset market.
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Market Volatility Hasn't Affected Bulls
On Tuesday, the Ethereum 2.0 beacon chain was officially released. Of course, there is still a long way to go from Ethereum 1.0 to 2.0 before this huge project is fully implemented. The risk of uncertainty brought about by this transfer may be the reason for the short-term drop in ETH prices around the release of Ethereum 2.0.
This week, the highest price of Ethereum reached $628, and the lowest price was $496. The price has fluctuated in a wide range this week, close to $130.
Ethereum price this week, as of 9 am on December 4th, source: tokeninsight.com
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But investors still have firm confidence in Ethereum: Although the price volatility of Ethereum has increased a lot, it has remained above $500 for the past two weeks, and the momentum is booming. In addition, the implied volatility of Ethereum perpetual is higher than the actual volatility recently, and the implied volatility of its at-the-money options is also at a high level compared with last month.
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The surge in contract transactions after the release of Ethereum 2.0 is also a signal that investors are optimistic about the Ethereum ecosystem. On Dec. 2, the trading volume of perpetual contracts reached a weekly high of $3.1 billion, reflecting continued investor optimism.
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The price of bitcoin managed to hit a new high of $19,785, surpassing its all-time high in 2017 and proving that it is not the "tulip" some pundits are calling it. After this Monday, the price of Bitcoin stabilized above $18,000, and the weekly average price also remained above $18,600. The future can be expected.
Monthly price comparison between Bitcoin and Ethereum, as of 9 am on December 4th, source: tokeninsight.com
Bitcoin contract trading volume this week, as of 9 am on December 4, source: tokeninsight.com
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Compared to other mainstream digital assets, XRP has performed even better in the last month. Relying on the endorsement of large institutions, the price of XRP has more than doubled, but its rise and fall are still closely related to other major digital assets.
The price increase and correlation coefficient of four major digital assets in the past 30 days, as of 9 am on December 4, source: tokeninsight.com
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Goodbye, wet season
The supply of cheap water and electricity for bitcoin mining in southwestern China has gradually ceased due to the end of the wet season. This led to a decline in Bitcoin computing power.
Beginning in October, the wet season begins to gradually shift to the dry season. Some miners began to transfer mining machines to find cheaper electricity prices. However, there are still some miners who are willing to wait until the end of the flat water period before starting to take action. In terms of computing power, from mid-October to early November, the total computing power of Bitcoin dropped by about a quarter.
But these minor annoyances have had little effect on miners' enthusiasm. The inventory of Bitcoin mining machines has been snapped up; and orders for mining machines have been lined up until mid-2021.
The total computing power of Bitcoin in the last 90 days (7-day average), source: blockchain.com
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DeFi keeps up with the bull market
Consistent with the growth of DeFi asset prices is the good overall performance of DeFi. DeFi locked value reached a record high ($14.78 billion) this week.
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Highlights of the week
Highlights of the week
S&P Dow Jones Indices to Launch Digital Asset Index in 2021
S&P Dow Jones Indices said it will launch digital asset services in partnership with digital asset provider Lukka in 2021.
Grayscale Ethereum Trust Announces Share Split
On Wednesday, December 3, 2020, Grayscale announced a "9:1" share split for the ETHE products issued by its Ethereum Trust. After the split, each shareholder will hold an additional 8 shares of ETHE, but the total The price remains unchanged.
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To prevent illegal fund-raising activities under the banner of "blockchain" and "virtual currency" by various financial platforms, TokenInsight will strictly abide by national laws and regulatory regulations, and resolutely resist the use of blockchain for illegal fund-raising, network pyramid schemes, 1C0 and other Variations, dissemination of bad information and other illegal acts.
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