Editor's Note: This article comes fromJishi Communication (ID: SJJ_Telecom), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Jishi Communication (ID: SJJ_Telecom)
Jishi Communication (ID: SJJ_Telecom)
, reprinted by Odaily with authorization.
Event: Global assets fell, and Bitcoin failed to survive alone, falling by more than 40% in a single week. Under the plunge, we further analyzed the attributes of Bitcoin assets and the risks and opportunities of the upstream mining industry.
In a weak market, the energy efficiency ratio of mining machines is more important. At present, mining machines with an energy consumption ratio of 75J/TH are on the verge of shutting down. Under the current market conditions, machines with energy consumption below 50J/TH are the best candidates. They can maintain a certain leading edge in the next two to three years, which is relatively safe. .
Risk warning: Uncertainty in regulatory policies, blockchain infrastructure development is not up to expectations.
At present, Bitcoin is a special alternative asset, and its correlation with gold and emerging markets is not obvious. Although Bitcoin and gold have many similar attributes, the analysis of the price correlation between the two shows that the correlation between Bitcoin and gold is not high; similarly, the correlation between Bitcoin and the MSCI emerging market index is not obvious. At present, we still think that Bitcoin is a special alternative asset, but in recent years, it has attracted more attention from the traditional capital market, and it has certain interoperability with other assets in terms of liquidity.
Last week's market review: Chainext CSI 100 fell 33.76%, and transaction payment performed best in the sub-sector. From the perspective of subdivided sectors, payment transactions and AI are better than the average level of Chainext CSI 100, which are -29.43% and -32.22% respectively; Pure coins performed worse than the Chainext CSI 100 average, respectively -48.58%, -33.83%, -45.21%, -43.71%, -37.94%, -37.63%, -34.07%.
Risk warning: Uncertainty in regulatory policies, blockchain infrastructure development is not up to expectations.
secondary title
1. Under the plunge, how do you view the attributes of Bitcoin assets and the mining industry?
Event: Global assets fell, and Bitcoin failed to survive alone, falling by more than 40% in a single week. Under the plunge, we further analyzed the attributes of Bitcoin assets and the risks and opportunities of the upstream mining industry.
In the context of the sharp drop in the global market, Bitcoin plummeted by 40%, and the prosperity driven by leverage is no longer. In the context of the global spread of the epidemic and the sharp drop in the global market, last week Bitcoin fell by more than 40% on the 7th (from the previous peak by more than 70%). Within hours, the entire network had a total liquidation of 565 million US dollars. In 2019, some financial institutions began to appear in the market to do digital currency pledge lending, and the currency market, driven by leverage, showed a certain "prosperity" scene. This drop in currency prices is a process of market deleveraging.
The currency price is close to halving, but the computing power has not fluctuated significantly, highlighting the flexibility of the mining industry. Mining is resilient for two reasons:
1. Due to the constraints of the electricity use contract, the mine cannot be shut down. Since mining is a high-energy-consuming physical industry, many mining farms have signed power supply agreements with power suppliers in order to stabilize electricity prices or obtain relatively low electricity prices, such as paying a power deposit of about one month. Unable to shut down, so the computing power does not fluctuate significantly;
2. Miners have a strong willingness to hold coins at low positions. Since miners earn bitcoin rewards for mining, there is a certain period of holding coins, and they are not sold immediately after digging. Therefore, some miners expect that the price drop of the currency will only be a flash drop, and there is a possibility of recovery. Therefore, it is not shut down temporarily. The computing power has not fluctuated significantly. If the currency price is at a low level for a long time, the computing power will still drop.
The mining industry has its own flexibility, and whether to shut down or not depends on the actual situation of the mining tool. If the current state is maintained, the miners of all individual miners who use outdated machines and high electricity prices will shut down. If these machines are sold to the mine at a lower price, they can continue to operate and bring certain profits when the mine can get a low electricity price. At present, there may be several situations in the miner group:
1. Groups who use digital currency to pledge loans and increase leverage have a high probability of liquidation and will definitely shut down;
2. Miners who use digital currency hedging have low leverage and are less affected by currency prices. As long as they do not buy outdated mining machines, they will not shut down;
3. For miners with outdated mining machines, it is difficult for mines to attract investment due to the drop in currency prices. They can go to the mine to negotiate electricity prices, and they may not shut down;
4. Miners with sufficient capital reserves can buy some low-priced mining machines to prepare for the period of high water and low electricity prices.
The "halving" of Bitcoin mining rewards is imminent. In the next six months or so, if the current currency price is maintained, the currency price continues to fall, and the currency price rebounds, how will the mining market change?
Ø If the currency price drops by another 25%-30%, about one-third of the outdated machines in the entire network will not be able to make profits during the high electricity price period, and the computing power will also drop by about one-third. At this time, only advanced machines with low energy consumption can continue to mine. The benefits measured by the currency standard for these people are expected to increase significantly due to the decline in the computing power of the entire network.
Ø If the currency price rises, the mining machine will not be shut down, and new mining machines will enter the market, and the income is expected to be higher than in 2018. Although the price of the currency has risen significantly in 2018, the computing power has also increased a lot, and the income per unit of computing power has not increased much. Recently, due to factors such as the epidemic situation, 5G, and the extrusion chip production capacity of the Internet of Things, the production capacity of mining machine manufacturers may not keep up. On the other hand, the increase in computing power is not much. If the currency price rises at this time, the income per unit of computing power will be considerable.
The energy efficiency ratio of mining machines comes first. Mining machines have the concept of energy efficiency ratio. The unit is J/TH, which is the electrical energy consumed by a unit of computing power. At present, mining machines with an energy consumption ratio of 75J/TH are on the verge of shutting down. Under the current market conditions, machines with energy consumption below 50J/TH are the best candidates. They can maintain a certain leading edge in the next two to three years, which is relatively safe. .
At present, Bitcoin is a special alternative asset, and its correlation with gold and emerging markets is not obvious. Some people in the market believe that Bitcoin and gold have more similar attributes, so they regard Bitcoin as "digital gold". We conducted a data analysis on the correlation between Bitcoin and gold prices, and the results showed that in the past few years, there was no obvious correlation between Bitcoin and gold prices (considering the recent sharp drop in global markets, the correlation coefficient in the past month close to 1). The so-called "digital gold" is currently only a more realistic prospect for the future application of Bitcoin. Likewise, the correlation between Bitcoin and the MSCI Emerging Markets Index is not significant. Therefore, we still believe that Bitcoin is a special alternative asset with its own logic of existence. In recent years, as traditional capital at home and abroad have been more involved in Bitcoin, Bitcoin holders have changed from early geeks , Code farmers have become a capital consortium, and it is difficult for them to survive the current global asset decline.
2. News related to governments of various countries: China's first provincial-level blockchain platform landed in Yunnan
China: On March 15, the country's first blockchain commodity code "Peacock Code" was officially launched. Provincial blockchain platform. Utilizing the characteristics of blockchain technology that cannot be tampered with, traceable, and multi-party credible collaboration, "Peacock Code" opens up commodity circulation links such as suppliers, sellers, logistics, governments, and testing agencies, and displays information through multiple channels , enhance consumer confidence in buying. Recently, the "Trade Finance Development Platform Key Technology R&D and Application Demonstration Project" piloted by the People's Bank of China's blockchain technology was approved as a key special project of the National Key R&D Plan, and will receive a total project funding of 32.35 million yuan in the next three years.
South Korea: The Gangwon Information and Culture Promotion Institute of Chuncheon, South Korea plans to spend 193 billion won (about 1.116 billion yuan) in five years to create a smart tourism ecosystem in Gangwon-do and integrate core technologies such as big data, artificial intelligence and blockchain into the system . On January 21 this year, the Korean Military Organization (MMA) launched its exclusive blockchain based on EOSIO software and launched a decentralized identity authentication (DID) system. In just one month, the MMA blockchain has recorded more than 50,000 user usage records, and up to now, the user data using the DID system has also been growing rapidly.
Australia: The Australian Taxation Office (ATO) will issue an audit reminder for cryptocurrency investors. Hundreds of thousands of Australians are set to receive warning letters from the Australian Taxation Office in the coming weeks. Cryptocurrencies are considered a form of property and therefore assets for capital gains tax purposes. This means that any financial gains from buying and selling cryptocurrencies are generally subject to capital gains tax and must be reported to the Australian Taxation Office. The letters will warn recipients to correct their tax returns and identify any undeclared profits or losses their investments may have incurred by April 1, or they could be audited.
secondary title
3. Industry chain-related dynamics: BTC mining revenue decreased by 36.4% month-on-month
Last week, BTC added 2.1 million transactions, a month-on-month decrease of 10.8%; ETH added 5.21 million transactions, a month-on-month increase of 10.8%.
Last week, the average daily income of BTC miners was US$11.36 million, a decrease of 36.4% month-on-month; the average daily income of ETH miners was US$1.71 million, a decrease of 31.6% month-on-month.
Last week, the average daily computing power of BTC reached 108.1EH/s, a month-on-month decrease of 10.8%; the average daily computing power of the entire ETH network reached 178.2TH/s, a month-on-month decrease of 1.6%.
We introduce a professional index product in the token market - Chainext CSI series index, in which the CSI 100 index [1] represents the overall trend of the market; the CSI 5 index [2] represents the trend of the super market currency; the CSI 21-100 index [3] Represents the trend of small and medium caps in the market. The market has continued to fluctuate and adjust in the past week. As of last Sunday (March 15), the Chainext CSI 100 index was 470.48, down 33.76% from last week, and the total trading volume in 24 hours on Sunday was 64.295 billion US dollars; among them, the global average price of BTC was 5392.31 US dollars, a month-on-month decrease 33.99%; the global average price of ETH is 125.21, a decrease of 39.70% month-on-month.
risk warning
Regulatory policy uncertainty. At present, the blockchain is in the early stage of development, and there are certain uncertainties in the supervision of blockchain technology, project financing and tokens in various countries around the world, so there are uncertainties in the development of industry company projects.
Blockchain infrastructure development falls short of expectations. Blockchain is the core technology to solve supply chain finance and digital identity. At present, blockchain infrastructure cannot support high-performance network deployment. The degree of decentralization and security will restrict high performance. Blockchain infrastructure exists The risk of developing less than expected.
