Author | Brockqin
Editing | Gatekeeper Operations |
The cryptocurrency industry in the first half of 2021 can be described as ups and downs.
At the beginning of the first half of the year, institutional companies led by Tesla and Microstrategy entered the market one after another with a high profile, and the currency price TO THE MOON, the industry is thriving; and then under the possibility of irrational prosperity, newcomers frantically poured into various MEME animals led by Dogecoin In the currency market, the myth of creating wealth dozens of times and hundreds of times has reappeared. In addition, under the background of various macro-control expectations, Musk’s defection seems to have become a watershed in the market trend; , and another blow from domestic regulation added fuel to the fire of the market. The market atmosphere cooled down rapidly, the price was almost cut in half, and the gas fee of Ethereum, which was high in the past, even stabilized in single digits.
Some people are wailing that the bear is coming, and some people insist that the bull is still there, and there will be a violent bull market. If the bull is still there, then everyone has a bright future, except of course the short sellers; if the bear comes, it is a good time to concentrate on promoting the progress of the industry's infrastructure, which is the ladder of industry progress.
Although we cannot accurately predict future bulls and bears,But maybe reviewing the past can help us grasp the opportunities of the future more accurately, and at the same time gain an in-depth understanding of the fundamental development of the industry.
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"BTC is still better than SPX and gold"
Price Correlation & Earnings Performance
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BTC & SPX & Gold Price Trends and Correlations
As can be seen from the above figure, in the first half of this year, in terms of price trend correlation:
• Bitcoin and SPX 500 are generally positively correlated, and most of the time are strongly positively correlated;
• Bitcoin and gold tend to be negatively correlated in general.
In general, the market trends of Bitcoin and U.S. stocks are similar, even if the time is extended back to 2020, the same is true. Both have experienced a deep V plunge due to the panic of the epidemic. Live for a long time to see continuous limit down.
What's interesting about this is that in the context of the global asset flood, gold, as a traditional value-stored asset for hedging inflation, has not performed well this year in terms of price and return. The overall trend in the first half of this year is a downward trend. Look at the specific data of the three in terms of price performance in the first half of the year:
• Bitcoin: 21%;
•SPX：14%;
•Gold：-7%；
It can be seen that despite the sharp correction in the currency market after mid-April this year, the price performance of Bitcoin in the first half of this year is still better than that of SPX and gold.
This may also explain that funds for hedging inflation in the market have gradually flowed out of the traditional gold market and instead flowed into the emerging market of Bitcoin. Hedge fund tycoon Paul Tudor Jones, investment queen Catherine Wood, Bridgewater Fund founder Dario and other traditional investment tycoons are just beginning to love Bitcoin. The future has come, but it has not yet become popular.
ETH & DeFi
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BTC market cap ratio & ETH\BTC exchange rate
Under the confidence of EIP-1559 and the upgrade and optimization of the future PoS merger, the ETH community once again shouted the slogan of "surpassing Bitcoin". Unfortunately, half of the revolution is complete. If the market value of Ethereum wants to surpass Bitcoin, the exchange rate must rise to at least 0.16.
According to statistics from CoinGecko, the total market value of DeFi tokens in the first half of 2021 rose from nearly US$21.9 billion to US$68.3 billion, an increase of approximately 312%.The total market value during the period reached a maximum of 150 billion U.S. dollars。
In addition, the return rate of the DeFiPulse index in the first half of the year was about 117%; (the DeFiPulse index is a market value-weighted DeFi index, which selects 10 mainstream DeFi tokens as a diversified combination to track the performance of the DeFiPulse index), and the highest return rate during the period was about It was 400%, which significantly outperformed BTC, but failed to outperform ETH. In the first half of the year, the return rate of ETH was about 187%.The highest rate of return during the period is about 552%。
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"DeFi has exploded, and the amount of locked positions and the number of users have repeatedly hit new highs"
Locked amount (TVL)
The lock-up volume is one of the important indicators to measure the scale of the DeFi ecosystem. It is obtained by calculating the sum of the total value (USD) of all ETH and various ERC-20 tokens locked in the smart contracts of the DeFi protocol.
According to the statistics of TheBlock, in the first half of 2021, the net lock-up volume of the Ethereum DeFi ecosystem increased from a maximum of US$13.7 billion to approximately US$69.4 billion, a maximum increase of about 500%; and then due to the decline in the market, the net lock-up volume gradually declined , as of June 30, the net lock-up volume was about 40 billion US dollars, and the net lock-up volume had withdrawn by about 42%.
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Ethereum DeFi locked-up volume in the first half of 2021 | Source: TheBlock
However, since the lock-up amount is denominated in US dollars, the price fluctuations of ETH, DeFi tokens, etc. will also directly affect the total lock-up value, that is, when the number of locked-up tokens remains unchanged, the price of tokens will rise. Lockup volume will also increase.
Therefore, when we use this indicator to measure the ecological scale, we can also refer to the two indicators of ETH and BTC locked positions in DeFi:
ETH locked in DeFi
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ETH locked in DeFi | Source: DeFi Pulse
BTC locked in DeFi
According to statistics from Dune Analytics, in the first half of 2021, the amount of BTC locked in DeFi increased from approximately 133,105 to 249,714, and the locked BTC increased by 116,609, a growth rate of approximately 88%.
BTC locked in DeFi | Source: Dune Analytics
The BTC currently entering the Ethereum DeFi ecosystem has exceeded nearly 1% of the total BTC, accounting for 1.181%, contributing nearly 10 billion U.S. dollars in lock-up value to the Ethereum DeFi ecosystem.
For Bitcoin hodlers, the popularity of the ERC-20 series of BTC in the Ethereum DeFi ecosystem is also helpful. When hodler needs cash flow but is not willing to sell BTC for the time being, BTC can be used for mortgage loan.
According to statistics from daistats, currently in the Maker agreement, about 4.4% of DAI is issued as collateral with WBTC.
Subscribers
Subscribers
The measurement of this "number of users" indicator assumes that one independent address represents one user. In reality, one user may have multiple independent addresses, so the data may be overestimated. In addition, the growth users of different protocols will also overlap.
The number of DeFi users is one of the important indicators to measure the development and activity of the DeFi ecosystem.
Today, DeFi applications have become the main theme of industry development. After exploring the applications of various scenarios, developers have found that DeFi applications are the direction with the most market fit.
In the first half of 2021, under the background of the overall bull market in the market and the encouragement of various liquidity income mining, the DeFi ecosystem is in full bloom, ushering in another wave of user growth. According to statistics from Dune Analytics, the number of Ethereum DeFi ecological users has surged from approximately 1,177,327 to 2,890,005,image description。
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"USDC rises, USDT market share declines"
According to statistics from TheBlock, the total issuance of mainstream stablecoins in the market in the first half of 2021 will increase from approximately US$29 billion to approximately US$107.8 billion.The growth rate is about 272%。
From the figure, we can see that the growth rate of stablecoin issuance in the early stage was relatively fast, indicating that the demand for new funds to enter the market was strong at that time; The coldness of the current market.
It is worth noting that in the first half of the year, the market share of USDT, the big brother of the stable currency, continued to decline, from about 75% to about 60%. Correspondingly, the market share of USDC increased.From about 14% to about 23%。
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"NFT has turned from fanaticism to active and stable"
NFT is a perfect combination of out-of-circle and market fit in the cryptocurrency industry.
In the first half of 2021, we have witnessed the rise of the NFT field, but we all know that this is only the tip of the iceberg of the potential NFT market, and this is just the beginning. In the future, NFT will be used in digital art, blockchain games, and asset liquidity solutions. Programs and other programs shine.
According to TheBlock's statistics, in the first half of 2021, the weekly trading volume of the NFT mainstream market has been growing steadily. From February to March, the weekly trading volume reached a peak of nearly 200 million US dollars. Beeple's NFT work "Everyday" was released on March 11. It was sold at a price of 69.3 million U.S. dollars on a daily basis; then the NFT market gradually returned to rationality from the frenzy, coupled with the coldness of the currency market, the weekly trading volume of NFT has withdrawn, but it is currently stable at 40 million U.S. dollars about.
Although the weekly trading volume of NFT has dropped in the latter part of the first half of the year, we can see from the figure below that the weekly trading volume of NFT is relatively stable, basically fluctuating between 1 million and 1.5 million. It can be seen that the current NFT application market has generated a certain degree of user stickiness, even after the frenzy,first level title。
"Looking back on the past, looking forward to the future"
Looking back at all aspects of the industry data in the first half of 2021, we can clearly understand that even though the market has been cut in half and market activities are gradually cooling down, the fundamentals of the industry data are still solid, which makes us more firmly believe in and look forward to the future of the industry .
It can be believed that Bitcoin is about to exert its strength. Even if the situation facing Bitcoin at the end of the first half of the year is not optimistic, under the political correctness of carbon neutrality and the suppression of domestic mining, there will be some FUD in the short term, but in the long run , This is all to enhance the anti-fragility of Bitcoin. In the future, the proportion of Bitcoin’s clean energy usage is bound to increase, and the mining distribution is bound to be more decentralized.
At the same time, El Salvador's move to treat Bitcoin as a legal tender is bound to help Bitcoin's status and adoption. At least, the President of El Salvador announced that the government will airdrop $30 worth of Bitcoin to every adult citizen in the country. The influx of approximately 6.45 million Salvadorans means that Bitcoin's global user base will grow by 6.5%.
It is believed that Ethereum may surpass Bitcoin. Even if it is only half successful this year, Ethereum is evolving rapidly. With the addition of modules such as EIP1559, PoS, DeFi, and NFT, everything is possible.
It can be believed that DeFi is just the beginning. Even though the current DeFi users are growing rapidly, the current high fees still prevent many users from entering the DeFi world. We expect that the introduction of various Layer 2 scalability solutions in the second half of this year can solve these obstacles in one fell swoop. Lushi, at that time, the total locked-up amount of DeFi will be greatly increased, and the application scenarios of DeFi will be more diversified, and we look forward to the qualitative changes that may be caused by such quantitative changes.
Even if the bull market really stops in the first half of the year, we also believe that the pace of industry progress will continue to move forward in the second half of the year. As long as the industry is developing and progressing, there will be a next higher peak.
