The third Bitcoin halving is completed, where will the exchange funds go?
This article is from:Hashpie (ID: hashpie), Author: LucyCheng, forwarded with authorization.
1. Overview
This article is from:
Hashpie (ID: hashpie)
, Author: LucyCheng, forwarded with authorization.
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Since April, Bitcoin has gradually recovered from the plunge in the cryptocurrency market on March 12, and the price trend has re-entered the upward channel, with an increase of more than 38 percentage points within the month. After the completion of the third halving, Bitcoin's gains continued unabated, and even touched the $10,000 mark several times.
Judging from market data, the current market sentiment is relatively optimistic. However, what does not match the price increase is that the exchange holdings are continuing to lose a lot. In this article, HashPie will analyze the trend of Bitcoin withdrawn from the exchange, so as to observe the changes in the current market capital trend.
Affected by the spread of the epidemic, many places around the world fell into a "technical bear market" on March 12, 2020 Beijing time. The US S&P index fell by more than 7%, triggering the second circuit breaker of the week. The three major stock indexes all fell by more than 5% at the opening. From the evening of the same day to the morning of the 13th, the price of Bitcoin also fell in a waterfall, falling below 7000, 6000 and 5000 US dollars in succession, and once touched 4748 US dollars, a new low since April 2019 (data source: Coinmarketcap).
SOPR ratio developed by Renato Shirakashi (data source: Glassnode)
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The price trend of Bitcoin in the past three months (data source: Glassnode)
At the same time, other market data also showed a more optimistic market sentiment. The SOPR ratio (spending/output profit ratio), which can be used to measure people's sentiment and behavior, was significantly lower than 1 during March and April, indicating that the market as a whole is not profitable. By the end of April, the market gradually recovered from the crash, and the SOPR ratio began to rise, and it is currently basically maintained at a level above 1.
SOPR ratio developed by Renato Shirakashi (data source: Glassnode)
On the other hand, in the futures market, the Perpetual Funding Rate (PFR) also rose to around 0 after the market recovered. Since the beginning of May, the perpetual funding rate has continued to rise, and it has basically remained at a positive level after the Bitcoin halving; this means that current market investors are biased towards bullishness.
Bitcoin perpetual contract funding rate (data source: Glassnode)
From the perspective of market performance, the market has gradually recovered from the market crash on March 12 after the end of April; at the same time, affected by the news of Bitcoin halving, the current market sentiment is relatively positive, and various indicators show a relatively optimistic situation .
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3. More than 300,000 BTC were withdrawn from the exchange, and major exchanges lost about 25% of Bitcoin on average
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Bitcoin stocks on exchanges (data source: Glassnode)
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The Bitcoin holdings of each exchange in the first half of 2020 (data source: ViewBase)
OKEX, Binance, Huobi, and BitMEX are the futures trading platforms with the highest trading volume. Among them, the bitcoin deposits of OKEX and Binance increased significantly in March, and more than 20,000 bitcoins were transferred to OKEX on the day of the sharp drop on March 13 alone. However, in May, large withdrawals on the platform began to increase, and a total of more than 50,000 bitcoins were withdrawn from OKEX and Binance within the month. Huobi, whose daily futures trading volume is comparable to that of OKEX, lost less than the former two, but its Bitcoin holdings also showed signs of decline in April and May.
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Similar to the above exchanges, Bitfinex, which focuses on the spot market, also experienced a significant withdrawal of funds in May. But the difference is that its Bitcoin holdings have been losing since March. As shown in the figure above, from March to May, large-amount withdrawals related to Bitfinex were frequent, with an average of more than 30,000 BTC withdrawn from the platform every month.
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Currently, Coinbase, the exchange with the largest Bitcoin holdings, also experienced a large number of large-value withdrawal transactions from March to May; but the overall Bitcoin holdings of the exchange remained basically unchanged at 970,000 level of about 100 pieces.
The large amount of outflow did not have too much impact on the total balance of Bitcoin on the platform, indicating that Coinbase retail investors have made a large number of small recharges in the past six months, thus filling the gap in the outflow of funds from some large accounts. According to the data from the Coinbase website, affected by the sharp price drop in March, the number of new user registrations on the platform tripled compared with the average of the last 12 months, while trading users and total trading volume also tripled and sixfolded respectively. increase.
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The growth of non-zero addresses in the Bitcoin network (data source: Glassnode)
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Following the upward trend of non-zero addresses, the number of addresses with Bitcoin balances greater than 0.01 BTC, 0.1 BTC, and 1 BTC in the network also increased steadily from March to May. However, judging from the data in the figure above, while the number of addresses in each balance segment has increased, the proportion of addresses with less than 0.1 BTC in non-zero addresses has continued to decline slightly. This side shows that a large number of retail investors tend to accumulate Bitcoin performance during this period.
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However, as the Bitcoin halving period approached, this behavior of retail investors rushing to accumulate Bitcoin gradually disappeared, and investors turned to hoarding coins to wait and see. According to data from Glassnode, after the halving, the growth rate of small addresses with a balance greater than 1 BTC began to slow down, and the activity on the chain also showed a downward trend. At the same time, the daily trading volume of Bitcoin in the market has also declined. The average daily trading volume after the halving of the month was about 27% lower than the average daily trading volume before the halving.
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Changes in Bitcoin price and transaction volume in May 2020 (data source: CryptoCompare)
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5. Institutional investors increased their holdings of Bitcoin, buying more than half of the newly mined Bitcoin
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The increase and decrease of addresses with a balance greater than 1,000 BTC in 2020 (data source: Glassnode)
Among them, Cash App is a multi-functional transfer and payment software headquartered in San Francisco-based Square. The platform will purchase about 8% of the new supply of Bitcoin every quarter; however, according to the data analysis of cryptocurrency trader Alistair Milne, Cash The app purchased 23.15% of the total newly mined bitcoins in Q1 of 2020. While Cash App purchased a large amount of Bitcoin, the sales volume of the platform was also increasing, and it sold at least 18% of the total newly mined Bitcoin in the first quarter. In addition, it is worth mentioning that the platform has recently quietly increased the weekly purchase limit of Bitcoin, seemingly in order to meet the needs of users (source: CoinGape).
On the other hand, according to data from Grayscale’s first quarter 2020 report, the Bitcoin trust fund added $389 million in new investments during this period, double the $1.94 in the fourth quarter of 2019, a record high. Best quarter on record. After the halving of Bitcoin, Grayscale continued to increase its holdings of Bitcoin, buying more than 18,910 BTCs, which was 150% of the total amount of newly produced Bitcoins after the halving. Not only that, Grayscale also purchased about 50% of the newly mined Ethereum in 2020.
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Bitcoin futures positions on the Chicago Mercantile Exchange (data source: Skew)
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6. The stock transfer of top exchanges, large amounts of funds mainly flow to Coinbase
According to the statistics of PANews, in addition to frequently transferring large amounts of Bitcoin out of exchanges, whale addresses also transfer between exchanges. Since April, Coinbase has received a huge amount of large-value recharge transactions from other exchanges, among which the transfer volume from OKEX and Binance is the largest; while the large-value transactions from OKEX accounted for Coinbase 5 50% of monthly large recharge transactions. Similar to this is the transfer trajectory of large amounts of Bitcoin from Huobi to Binance and from OKEX to Binance. Also, half of Binance’s large recharge transactions since May also originated from OKEX.
The flow of domestic exchanges to US-compliant exchanges is due to the safety considerations of large investors on the one hand, and the natural expression of chips flowing from cold places to hot places on the other hand. Judging from the influx of large-value transfer transactions into Coinbase and the entry of retail investors mentioned above, American investors are more interested in Bitcoin before and after Bitcoin halving.
7. Summary
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USDT price trend (data source: Kraken)
