Boiling 2020: How will the two jewels of the crown, Bitcoin and Ethereum next year
Preface: 2020 is a boiling year. From 312 to a new high of Bitcoin, from the DeFi frenzy to the launch of Filecoin. "A bull market can make money for 10 years", but there are also people who contract losses and cause tragedies. 2021 is ushered in the noise, but fortunately, we still have the freedom to choose.
The following is Wu Shuo's year-end inventory of the blockchain "Boiling 2020" series 1: Everything is changing. Let's first look at the two major engines of the industry: Bitcoin and Ethereum.
Recently, due to Ripple being investigated by the SEC, all currencies except BTC/ETH have fallen sharply. These two mature decentralized cryptocurrencies are more prominent because the government cannot supervise them. On the morning of the 26th, Beijing time, the price of Bitcoin broke through 25,000 US dollars, setting a new high.
2020 is coming to an end, and this moment is worth thinking about and reviewing. Some people say that this year is a year of disaster, but hope often coexists with disaster. For the secondary market, this year is a long-lost bull market.
The same is true for the cryptocurrency market. Bitcoin has experienced a trough of 3,000 and has reached a new high of 25,000; the rekindling of DeFi and the landing of Ethereum 2.0 make us have to re-examine the value of Ethereum.
Let's review the major events of Bitcoin and Ethereum in 2020 and look forward to the future. (The following data are all data on December 18)
According to Binance data, since the beginning of the year, Bitcoin has increased by nearly 218.88%, and the current price is floating at 23,000 US dollars; Ethereum has increased by nearly 393.13%, and the current price is floating at 650 US dollars.
Ⅰ. Black Friday, March 12
Affected by the rapid spread of the new crown epidemic, Western countries led by the United States have underestimated the epidemic and their anti-epidemic policies have fallen short of expectations. The panic of the global economic recession has spread and shaken the global financial market. The global financial market has not been spared, and there has been a consistent plunge.
The three major U.S. indexes all fell by more than 9%, triggering a second circuit breaker; the London Financial Times 100 Index fell by more than 10%; gold once fell below $1,600 per ounce.
According to data from Binance, on March 12, the biggest drop of Bitcoin was 39.5%, and the biggest drop of Ethereum was 44.6%. 100 US dollars, the lowest fell to 86 US dollars.
In the face of the sudden plunge, the major platform exchanges experienced server freezes during the plunge, and even "unplugged the network cable" and went offline for maintenance. A large number of futures investors suffered heavy losses.
Ⅱ. On May 12, Bitcoin ushered in the third halving
On May 12, Bitcoin ushered in the third halving in history, and the block reward was reduced from 12.5 BTC to 6.25 BTC. Every halving of Bitcoin has attracted much attention and anticipation. Historical trends show that the prosperous bull market in the cryptocurrency market is all after the halving of Bitcoin.
According to Binance data, the closing price of Bitcoin on the day was $8,810.79, and the price of Bitcoin as of now is about $23,000, an increase of more than 260%. The closing price of Ethereum was $189.76, an increase of more than 340%. In addition, all major mainstream currencies have seen different degrees of growth.
Ⅲ. COMP launched liquidity mining on June 15, and the DeFi boom ignited
COMP launched liquidity mining on June 15th, taking the lead in taking the lead in the development of the DeFi market. Subsequently, DeFi projects such as Uniswap, YFI, AMPL, and Sushiswap sprung up on major trading platforms, and the DeFi boom hit again.
Once a new DeFi project is launched, it can demonstrate a strong ability to attract money. Mainstream currencies with such a high consensus such as Bitcoin and Ethereum will inevitably be blood-sucked by the enthusiasm of DeFi.
Despite being short-lived, Ethereum has benefited the most from the DeFi boom. Most DeFi projects are based on the issuance of Tokens based on Ethereum. As the most common basic asset in liquidity mining, Ethereum has a high consensus and easy transaction acquisition. In addition, the frenzy of liquidity mining will attract more funds to be locked in Ethereum In the ecology, this will greatly strengthen the value of Ethereum.
Based on the latest data from Okey Cloud Chain, the current locked-up market value of Ethereum is $19.20B, and the 24-hour trading volume is $1.69B, an increase of more than 10 times compared to June.
Ⅳ. Ethereum 2.0 officially launched on December 1
At 8:00 p.m. on December 1st, the Ethereum 2.0 genesis block was confirmed, and the much-anticipated Ethereum 2.0 era officially arrived. The two biggest changes in Ethereum 2.0 are the adoption of the "beacon chain + shard chain" structure, and the change of the consensus mechanism from PoW to PoS.
With the change of the consensus mechanism, Ethereum mining will be more favored. The transaction volume on the chain and the computing power of the entire network have nearly doubled compared with the beginning of the year, maintaining rapid growth. On the last day of the effective pledge period on November 24, more than 300,000 ethers flowed into the deposit contract address, making the deposit progress of the beacon chain rush from 57% to 100% within one day. At the same time, the price of Ethereum broke through the $600 mark on the same day, setting a new high in 29 months, and the highest single-day increase was 4.9%. It can be seen that the continuous rise in the price of Ethereum has a lot to do with the promotion of Ethereum 2.0. With the value empowerment of the 2.0 era, the price of Ethereum is expected to further strengthen.
Ⅴ. Entry of Institutional Investors
According to the latest data from qkl123, the holdings of BTC-Greyscale Trust are 570,855 pieces, and the holdings of ETH-Grayscale Trust are 2,939,940 pieces. Since the first purchase in June, the average daily accumulation of BTC-Grayscale Trust is about 2,970 pieces, and the average daily increase of ETH-Grayscale Trust is about 15,310 pieces. 1000 floats, and the number of newly mined coins in Ethereum fluctuates between 15,000 and 25,000 coins per day.
In response to the negative impact of the epidemic, various countries have implemented loose monetary policies. Under the flood, the depreciation of legal currency has been accelerated, and mainstream cryptocurrencies led by Bitcoin and Ethereum, which have natural anti-inflation properties, have entered the field of vision of institutional investors. In addition to Grayscale Fund, there are also giants of financial institutions in traditional fields such as MicroStrategy (listed on NASDAQ), Square (payment giant), Stone Ridge Holdings (asset management company), PayPal (cross-border payment platform) and other high-profile announcements to buy Bitcoin or its other mainstream currencies. And with the growth of Grayscale Trust Fund and the entry of traditional financial giants, more and more professional investors, rich people, and institutions are buying Bitcoin through Grayscale Trust Fund, and even realize arbitrage in the US stock secondary market.
The entry of institutional investors, especially the giants of traditional financial institutions, has sent a positive signal to the mainstream cryptocurrency led by Bitcoin, which will greatly enhance investors' confidence.
2021 Bull Market Prediction
There is no doubt that we are now in a bull cycle. The bull market does not talk about the top, and it is always difficult to predict the future. Below we will use some on-chain indicators to judge the current position, and judge the future space by comparing with the previous bull market.
Ⅰ. BTC-MVRV Ratio
MVRV is the ratio of market value to realized value, which is used to show the peak and recession of the price cycle, and helps investors find the deviation between the market value of Bitcoin and the realized value.
The current reading of the BTC-MVRV indicator is 2.83, reaching about 60% of the highest level in 2017, and the corresponding Bitcoin price is nearly four times from the peak of the bull market in 2017.
Ⅱ.BTC-VWAP ratio
VWAP is an alternative to realized price when determining the average price the market pays for tokens. The indicator can be used to find market tops and bottoms, while the global VWAP indicates macro cycle highs and lows.
The current reading of the BTC-VWAP indicator is 2.57, reaching about 58% of the highest level in 2017. The corresponding Bitcoin price has nearly 3.5 times the space from the peak of the bull market in 2017.
Ⅲ.BTC-RVT ratio
RVT is short for "Realized Value to Volume Ratio" and is a derivative of the MVRV ratio. RVT creates a useful signal for macro market tops and bottoms, and can also be used to determine what stage the market is in between these two transition points.
The current reading of the BTC-RVT indicator is 0.0343, reaching about 29% of the highest level in 2017. This indicator judges that the current price is still at the bottom, and is very optimistic about the future price. The corresponding Bitcoin price is nearly 29.9 times from the peak of the bull market in 2017. space.
Ⅳ.BTC-Mayer Multiple
The Mayer Multiple is calculated by dividing the Bitcoin price by the 200-day moving average of the price. The current price of Bitcoin is measured against long-term historical price action (the 200-day moving average), which highlights when Bitcoin is overbought or oversold on longer time frames.
The current reading of the BTC-Mayer Multiple indicator is 1.86, reaching about 49% of the highest level in 2017. The corresponding Bitcoin price has nearly 11.5 times the space from the peak of the bull market in 2017.
Ⅴ.BTC-Realized HODL Ratio
A high ratio indicates an overheated market and can be used to time cycle tops.
The current reading of the BTC-RHODL indicator is 4417, which is about 4.6% of the highest level in 2017. The corresponding Bitcoin price has nearly 13.6 times the space from the peak of the bull market in 2017.
Ⅵ.ETH-Jiang Zhuoer’s 60-day cumulative increase
"60-day cumulative increase" means that when a round of bull market comes to the end, the market sentiment is frenzied, the bubble is serious, and the short-term currency price rise exceeds the speed of newcomers and new funds entering the market, the bull market bubble will burst, and the bear market will begin.
The current reading of ETH-Jiangzhuoer’s 60-day cumulative increase index is 57.04%, which is about 35.7% of the highest level of the bull market in 2017. The corresponding Ethereum price is nearly 2.7 times from the peak of the bull market in 2017.
Ⅶ.ETH-Mayer Multiple
Measures current overbought or oversold conditions by the long-term historical trend of the indicator.
The current reading of ETH-Mayer Multiple is 1.78, which is about 52% of the highest level of the bull market in 2017. The corresponding Ethereum price has nearly three times the space of the peak of the bull market in 2017.
The current indicators on the major chains indicate that the price of Bitcoin and Ethereum still has a lot of room to rise in the future, but it should also be noted that the current speculative bubble is much smaller than that in 2017. In 2021, there is reason to believe that more traditional institutions will deploy mainstream cryptocurrencies led by Bitcoin. (Contributing author: K Editor: Wu Shuo Blockchain)
