Editor's Note: This article comes fromBlockVC（ID：blockvcfund）, reprinted by Odaily with authorization.
, reprinted by Odaily with authorization.
BlockVC strategy research pointed out in "Grasping the "Structural Bull Market" under the Background of Monetary Easing" that under the background of global monetary easing and the continued weakening of the US dollar index, assets are rising, and it seems inevitable to push up the price of gold. In the past month, the international gold price broke through the previous high of 1923 points (November 2011), setting a new high in nearly ten years. BlockVC strategy research has repeatedly been optimistic that Bitcoin as "digital gold" will take over as a liquidity reservoir, and will have a good price performance in the future. Following the Bitcoin daily volatility index BVOL (provided by BitMEX) for nearly 20 trading days from the end of June to the end of July, it gradually converged to near historical lows, and the price of Bitcoin immediately followed gold and broke through upwards. After Russia announced the registration of vaccines in August, the risk aversion sentiment in the market eased, coupled with the flight of profit from above, gold prices stepped back on the 30-day moving average on August 11, falling nearly 6% in a single day. The digital currency market also "slumped" immediately after, and stabilized and recovered in the next few trading days. From a short-term perspective, Bitcoin price fluctuations in the past two weeks are greatly affected by gold, and the trend is highly correlated. Plotting the two prices on the same graph (the red line is gold), it is not difficult to find that under the investment logic of the long-term weakening of the US dollar, we have reason to believe that this synchronous trend will continue to exist in the future.
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When the capital market is facing a test, people are willing to exchange credit currency into gold for hedging or resisting inflation. Gold also played a central role in physical trade, becoming a settlement tool for trade across ethnic languages. At present, the human community is at the cusp of the fourth digital economic revolution, and Bitcoin also takes on a more important role in hedging and settlement functions with its unique advantages. Compared with physical gold, "digital gold" Bitcoin has the characteristics of zero storage pressure, more refined value segmentation, and cross-regional value circulation. There is no doubt that Bitcoin has long been a powerful weapon against global credit expansion and is on a long-term upward price channel. Continuing the previous views of the BlockVC strategy, since Bitcoin broke through the downward channel, a bull market trend above the weekly level has gradually formed.
However, despite the stable and powerful performance of Bitcoin in this round of rise, its market capitalization is still in a downward trend. A large amount of funds have re-entered other mainstream currencies and popular copycats that are in line with market concepts, driving the overall market value of the encryption world to increase by leaps and bounds.
Image source: Tradingview
The hype of the DeFi concept in the market and the wealth effect brought by small coins on the decentralized exchange Uniswap far exceed the expectations of "classical coin circles". The concept of DeFi is not new. It has been more than two years since it was proposed in 2018. It refers to "decentralized finance". The goal is to establish a multi-layered financial system based on blockchain technology and cryptocurrency. Re-create and improve the existing financial system. Total Value Locked (TVL) is an indicator to measure the gold-absorbing ability of the DeFi ecosystem. It refers to the total value of Ethereum deposited in a certain DeFi ecosystem. The TVL change curve in 2020 can be described as a roller coaster - the TVL of DeFi at the beginning of the year was 680 million US dollars, and it suddenly increased to 1.2 billion US dollars in the "bull market" market in February. After the 312 sharp drop, the market sentiment was greatly affected, and TVL had a cliff-like decline that was almost halved. But after that, it took less than three months for the market value to break through 3 billion U.S. dollars, the value of DeFi lockups increased by 4 times, and the total market value increased by about 10 times. At the same time, the number of active addresses in the Ethereum wallet also doubled. Doubling.
Everyone who takes the initiative in the DeFi wave is enjoying the frenzy and volatility brought by the market. Thinking carefully about this round of frenzy and the 2017 ICO bull market is somewhat similar. DeFi concept projects have sprung up like mushrooms, the scarcity of the primary market quota, and the brilliant performance of the secondary market after logging into the exchange, attracting a steady stream of investors to buy ETH and invest in DeFi projects to "lock in" ——These exuberant speculative demands constitute a strong buying of ETH, making ETH the only leader in this round of market. Due to the increase in the number of people engaged in small currency speculation on Uniswap and other decentralized exchanges, the gas fee paid for Ethereum transfers has repeatedly hit new highs, even passing through the ICO scene of the year. Perhaps seeing the growth space and dividends that DeFi brings to ETH, many public chain projects that benchmark against ETH are eager to announce their entry into DeFi after a long period of silence. EOS released a new DeFi project "DeFis", which made the price trend of EOS, which was mediocre in the secondary market, suddenly become stronger. There are also many old-fashioned projects such as TRX and ADA that have made similar moves. Based on their technical advantages compared with Ethereum, they have waved their flags and announced their embrace of DeFi.
Data source: etherscan.io
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Data source: Skew
Data source: Skew
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Data source: OKEX
