Hi, crypto communities,
We are delighted to provide you with our weekly review of the crypto market, beginning this week. We are very excited to work with CoinMarketCap to bring our research to the public. The review will be initially published on our website and the CMC blog.
If you have any questions or feedback, feel free to email us via firstname.lastname@example.org. We are happy to listen to any comments and provide the readers of CMC and TokenInsight with better content and analysis.
Getting Back to the ‘Old Times’
Bitcoin’s price reached its highest level since the end of 2017 this Wednesday: $18,400, which is just less than $1,500 on the way to reaching the historical highest price. After reaching $18,400, Bitcoin suffered a decline and then fluctuated around $18,000. Some analysts believe that $18,000 would be a tough line to break.
The weekly average price of BTC this week is $16,789, increasing 8.55% from last week ($15,467). Meanwhile, BTC price fluctuations have increased. These all show an active market emotion.
The rise in price was commonly considered to be due to the contribution of institutions’ entrance into crypto, such as PayPal and Grayscale. Grayscale has substantially been increasing its positions of cryptocurrencies (mostly Bitcoin) and showing no signs of stopping. Currently, cryptocurrencies under Grayscale’s custody have exceeded $10 billion, soaring 30% in only two weeks. Outside of the United States, Canadian cryptocurrency asset management company Galaxy Digital also recently launched a new Bitcoin fund.
The rush of institutional investors towards Bitcoin confirms that it’s hedging property is gradually being recognized. JPMorgan analysts said that institutional investors may look at Bitcoin as an alternative to gold, enriching their choices for “riskless” assets. Grayscale’s increase of positions may be because institutional investors and family offices аre turning their gold ETF investments to BTC.
If the concept “Bitcoin is the digital gold” could be embedded into crowds’ minds deeply and undoubtedly, it will widley benefit the development of Bitcoin and the blockchain industry. However, Bitcoin’s trading volume still accounts for less than 1/10 of the traditional gold market. Lots of investors still have limited acknowledgment and awareness of Bitcoin. Meanwhile, the lack of enough fiat gateways could be a long-term issue remaining to be solved.
The market needs more pioneers like Paypal, Facebook Libra to pave the way.
Besides, when the “invisible hand” exerts its enormous power, the “visible hand” is often too anxious and panicked to stand by. To get the market “under control,” the SEC has recently been looking for a trustworthy “qualified cryptocurrency custodian.” Immediately after the election, President Trump nominated the former chief legal officer of Coinbase as the Comptroller of the Currency, which may incentive the cryptocurrency industry in a positive way.
Bullish Momentum Pushes Massive Crowding Into the Crypto Market
BTC’s trading volume increased by 2.94% ($22.08 billion, 11 major exchanges tracked by TokenInsight), compared to last week, affected by its sharp price increase. Notably, the highest daily trading volume this week has reached $5.64 billion, up 254.72% compared to Monday.
Binance remained in the leading position in the past week, with its BTC-USDT trading pair exceedsing$10 billion, while Coinbase (BTC-USD) had a trading volume of approximately $2 billion.
BTC Perpetual Contract Trading Volume Hits a New Record in the Past Months
As the price of BTC rises, its futures market has also shown unprecedented activity in the past three months.
The total trading volume of BTC perpetual contracts on the 16 exchanges tracked by TokenInsight reached $172.3 billion this week, increasing 8.91%. The highest total daily trading volume has hit a new high in the past three months, reaching $45 billion, exceeding the highest value of the previous month by 65.44%. As BTC breaks through $18,000, it is more likely that BTC’s futures trading volume will continue to rise in the short term.
Activation & Enthusiasm in the Market Brought BTC Futures Open Interest Back to a High Level
In the same way as BTC’s price and trading volume, the open interest of BTC perpetual contracts has also reached a new high. As of Nov. 20, 09:00 (UTC+8), the total open interest of BTC perpetual contracts is about $4 billion, up 14.29% from the same period last week. As well, the total daily open interest of the BTC perpetual contracts this week remained above $3.3 billion, reaching a single-day maximum of $4.2 billion.
ETH Dropped After the Spike With BTC
At noon on Nov. 18, the price of ETH experienced a “flash crash” when it reached a new high. In an hour, the price fell 4.82%, from $494 to around $470, which caused a market panic.
- The weekly average price of ETH is $466.44, up 3.36% from the prior week;
- The daily trading volume of ETH has increased by 135.04 %, from $702 million on Nov. 16th to $1.65 billion on Nov. 19;
- ETH and BTC prices reached recent highs almost simultaneously (ETH’s new high was $494.08);
- The weekly ETH perpetual contracts trading volume is $31.3 billion, dropped by 14.25% from last week sharply;
- On Nov. 19, the daily transaction volume reached $7.2 billion;
- As of today, the open interest of ETH perpetual contracts is $982.7 million.
Highlights Picked by TokenInsight
SEC Chair Jay Clayton Calls Bitcoin ‘Store of Value’
SEC chairman Jay Clayton reaffirmed the agency’s stance on Bitcoin, claiming that it is not a security, during an interview on CNBC’s “Squawk Box” on Nov. 19. The SEC determined that Bitcoin much more resembled a payment mechanism and a store of value.
The SEC always keeps alert to cutting-edge markets, especially those like blockchain or cryptocurrency. The chairman’s statement shows the attitude of the government, which may make a difference for the future development of cryptocurrency.
Earlier this week, the SEC announced Jay Clayton will be leaving his post as the SEC chairman sooner this year. His departure could be a huge change to the cryptocurrency industry, especially after another crypto-friendly candidate Brain Brooks was nominated as his successor by President Trump.
OKEx Founder ‘Star’ Xu Is Back. OKEx Will Reopen the Withdrawals of Users’ Assets on Nov. 27. OKB Rose More Than 25% on Wednesday.
Star Xu apparently came back from detention on Nov. 19, leading OKEx to announce that they will reopen the withdrawal of funds before Nov. 27. The company also said that all assets of its users were 100% reserved. Because of the news, the exchange token of OKEx, OKB, went up by more than 25%. Seemingly affected by the OKEx news, Huobi’s exchange token, HT, also increased in price by around 10%.
According to Xu, he was asked to cooperate with an investigation because of equity M&A transactions a few years ago. Xu also stated that it has been proved that he committed no crimes.
With the Development of DeFi, Investors Are Increasingly Viewing Polkadot as the Next Ethereum
Investment company KR1 managing director Keld van Schreven said: “The market and investors have very strong demand for Polkadot’s DOT token.” He notes that the initial valuation of fundraising before the mainnet launch is about $3, and that “therefore, the transaction price that has remained above US$4 since then is encouraging.”
The development of Polkadot and cross-chain mechanisms have opened discussions and imagination in cross-chain DeFi, seen in experiments by some newly-launched DeFi projects. Although this sounds thrilling, the true need for a cross-chain DeFi ecosystem is still not clear for now, as the current Ethereum-based DeFi projects are dominating the whole DeFi ecosystem.
Uniswap Stopped Mining and the Total Volume Locked Dropped by 47.61%.
- Uniswap’s TVL fell 47.61%, from $2.718 billion to $1.424 billion;
- SushiSwap’s TVL rose from $407 million to $985 million, which increased by 142.01%.
Controversies always surrounded the emergence of forks, especially after SushiSwap. Uniswap has managed to keep its dominant market place, even while capital was flowing into Sushiswap. Uniswap’s percentage of trading volume and price of UNI hasn’t dropped much after the mining stopped.
What’s New With TokenInsight
This week, our research team has asked ourselves a question: the number of large-scale purchases of institutions has gradually begun to be greater than newly mined Bitcoin, which will lead to a decrease in the number of Bitcoin in circulation in the market. This means Bitcoin will be more difficult to buy for retail investors. Is this a good thing or a bad thing for the future of Bitcoin?
We have been waiting for the institutional investors to come into the market, but would that be the situation that we have dreamt of? Some day in the future, if most of the Bitcoin are owned by institutions, would Bitcoin be valuable again? TokenInsight internally has been discussing this question recently and we ended up with many opinions. We are happy to discuss it with anyone interested.Feel free to join us by the email included in the beginning of this piece.
Recently, we published our 2020Q3 exchange industry quarterly report. Check our website to see what has happened in the exchange industry for the last few months. Click the link below to read the report.
- 2020Q3 Spot Exchange Quarterly Report
- 2020Q3 Derivatives Exchange Quarterly Report
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