How strong is the "stamina" of the encryption market? 10 data tell you the answer

The latest data shows that as of April 14, Grayscale GBTC Trust has not increased its holdings of BTC for six consecutive weeks, as shown in the figure below.

Grayscale BTC holdings

At the same time, GBTC and other negative premiums have reached the highest in history. According to qkl123.com data, since the first negative premium (-3%) of GBTC on February 23, it has been in a negative premium state for 50 consecutive days, and the negative premium has reached -14%.

Grayscale GBTC Negative Premium

Does it mean institutions are ditching BTC? This is not the case. Various indicators show that the "stamina" of the encryption market is strong, and 10 data will reveal the secret for you.

According to data from Glassnode, as of early April, after a long sell-off, miners once again started the Bitcoin hoarding and saving mode. The so-called miners’ savings in BTC means that miners stop selling the BTC obtained through mining, which will obviously reduce the selling pressure in the secondary market.

Glassnode: It is expected that the crypto market may continue to trade sideways in early 2022: According to news on January 6, according to the latest data from the digital currency management company CoinShares, cryptocurrency funds have experienced investment outflows for three consecutive weeks. Outflows from the crypto industry totaled $32 million last week, totaling $260 million in the past three weeks, and overall inflows in 2021 hit $9.3 billion, up 36% from 2020, CoinShares said. It is worth mentioning that compared with other digital asset investment products, Bitcoin has the lowest increase in capital inflows. According to the latest research report of the blockchain data provider Glassnode, among many on-chain indicators, Bitcoin is generally lacking in vitality and liquidity is getting worse, while investor profitability and cyclical indicators paint a more complete picture. for a pessimistic picture. Glassnode concluded that with the balance of bull market and bear market signals, it is expected that the consolidation may continue in early 2022. (Reuters) [2022/1/6 8:29:39]

On April 5, Grayscale confirmed in a document submitted to the US SEC that it intends to convert its Bitcoin trust into an exchange-traded fund (ETF), and the timing of the conversion depends on the regulatory environment. Grayscale said its aim has always been to turn these products into ETFs. At present, Grayscale believes that the time is ripe, and said that after the goal is achieved, GBTC holders do not need to take any action, and Grayscale will lower the management fee. In fact, Grayscale had applied for an ETF as early as 2016, but then withdrew its application.

Crypto analyst: The crypto market is currently in the early stages of a bull market: Jinse Finance reported that cryptocurrency analyst Willy Woo just tweeted that the bull market really started in April 2019, and the most recent one that started the early stage of a major bull market was 2016 A repeat of the fourth quarter, but with a different dynamic and theme. One of the current themes is the legalization of Bitcoin for large institutional funds and making it easy for the general public to buy cryptocurrencies through things like PayPal. Woo believes that BTC will prove itself as a legitimate macro asset reserve for traditional investors in this cycle, and in the following cycle, Bitcoin will surpass gold to become an important digital value store in the digital age. Hopefully sovereign wealth funds will be able to deploy this cycle and the next. In addition, he also stated that ETH has reinvented itself as a DeFi platform rather than an ICO platform. Ethereum is on hyperdrive due to uniswap bubble. Some might say this is just another platform for a Ponzi scheme, but it cannot be denied that this experiment is an interesting takeaway for the crypto industry as a whole. [2020/8/10]

After the application was submitted, the GBTC negative premium situation has been alleviated. Since then, Millennium Management, a hedge fund with an asset size of US$48.3 billion, has been disclosed to hold Grayscale GBTC.

Founder of Messari: A large amount of capital is waiting for an opportunity to enter the encrypted market: On April 19, Ryan Selkis, founder of encrypted data provider Messari, said that cryptocurrency exchanges now hold more than $3 billion in stablecoins on behalf of their customers. And these large amounts of encrypted capital are in a wait-and-see state in order to wait for an opportunity to enter the encrypted markets such as Bitcoin and Ethereum. (The Daily Hodl)[2020/4/19]

Grayscale plans to convert Bitcoin Trust into Bitcoin ETF, which may allow the U.S. financial market to enter the encryption ETF transaction in advance, which is a great benefit to the industry.

Although the BTC inflow of Grayscale Trust has stagnated, this does not mean that the investment intensity of institutions in the cryptocurrency field has declined. In fact, the latest data shows that the investment intensity of institutions in the encryption field is showing an upward trend.

In early April, a new report from digital asset manager CoinShares showed that inflows into cryptocurrency funds rebounded five-fold to $106 million in the first week of April from a five-month low. The report also showed that in late March, as sideways trading in bitcoin and other digital asset markets failed to inspire buyers, fund flows fell to around $21 million, the lowest level since last October.

Voice | Opinion: In the next five years, the market value of encryption may reach 10 trillion U.S. dollars, and Bitcoin will rise to 140,000-280,000 U.S. dollars: Victor Dergunov, founder of Albright Investment Group, said in an article that the total amount of currency in circulation in the United States in the next few years Expected to double, this will set the stage for massive bitcoin and cryptocurrency adoption. He expects the U.S. to enter a recession, pushing the Fed to implement a more extreme "real quantitative easing" policy that will double the U.S. monetary base from $4 trillion to about $8 trillion by 2025. With rising inflation, Dergunov sees adoption of cryptocurrencies as a currency and store of value booming, with the entire cryptocurrency market capping as high as $10 trillion. According to Dergunov, the current market value of cryptocurrencies is only about 200 billion U.S. dollars, and it will increase by about 240% - 4900% from the current level in the future. In addition, Bitcoin's market value currently accounts for about 66.5%. In the future, even if Bitcoin's dominance drops to 50%, its market value will still grow to around $2.5 to $5 trillion. This means that the price of Bitcoin will reach 140,000 to 280,000 US dollars in the next 5 years. (The Daily Hodl)[2019/10/25]

Additionally, a rebound in trading volumes last week led to a record $4.5 billion in inflows into cryptocurrency funds in the first quarter of this year, about 11% higher than in the final quarter of 2020, according to CoinShares.

Voice | Joseph Young: Crypto market infrastructure is improving rapidly: Forbes analyst Joseph Young said on his social media that Coinbase Custody has officially become a qualified custodian in New York that can hold funds on behalf of investors. This is an important step towards institutionalizing the crypto market. With the emergence of Fidelity, BitGo, Coinbase, the crypto market infrastructure is improving rapidly. [2018/10/24]

Bitcoin is called digital gold. Compared with physical gold, it has the advantages of anonymity, decentralization, portability, and almost unlimited splitting. Under the new financial form, BTC is likely to surpass gold in its attractiveness to capital. In fact this is happening.

On April 11, independent investor Lobo Tiggre said that he is optimistic about gold in the long run, but there are four situations that may trigger a decline. Lobo Tiggre first mentioned the impact of Bitcoin on gold. Tiggre said bitcoin could draw money away from gold. There is some liquid capital chasing the bandwagon of the moment, and when Bitcoin soars, some of that capital will go into Bitcoin.

In addition, according to the statistics of Bloomberg and ByteTree.com, since October 2020, the capital inflow rate of gold is showing a downward trend, while the capital inflow rate of Bitcoin has shown a steady increase. Bitcoin, but it can also show from the side that Bitcoin's popularity is soaring.

Glassnode statistics show that in the past 12 months, 20% of the bitcoins on the world's popular trading exchanges and many other platforms have been withdrawn, which shows that investors are accumulating bitcoins in large quantities. For example, news.Bitcoin.com pointed out that in December 2020, exchange balances were sinking, and in October 2020, they were also lost.

In addition, according to data from cryptoquant.com, from May 2020 to April 2021, the number of cryptocurrencies held by global popular exchanges has dropped from 2.8 million to 2.2 million, a drop of 21%, and the number of reductions has reached 400,000.

According to the latest data from coingecko.com, as of April 14, including USDT, USDC, Dai and other stablecoins, the market value of stablecoins has reached 73 billion US dollars, a record high.

In addition, the latest data from cryptoquant.com shows that the number of stablecoins stored in the world's most popular exchanges is close to 10 billion US dollars.

Both the issuance of stablecoins and the number of stablecoins retained by exchanges have hit record highs, which is also a bullish signal for the market outlook.

Those who hold Bitcoin for more than 155 days are called long-term holders, while those who hold Bitcoin for less than 155 days are called short-term holders.

According to recent statistics from glassnode.com, since the beginning of this round of bull market, more and more bitcoins are older than 155 days (the white area in the figure), which shows that more and more investors tend to hold coins for a long time.

Bitcoin and Ethereum chain activity hit new highs repeatedly

According to the latest data from bitinfocharts.com, as shown in the figure, the current number of active-zce addresses on the Bitcoin chain has reached 970,000, reaching a historical high in December 2017, and the number of active-zce addresses on the Ethereum chain has reached 870,000, which is close to December 2017. The historical high of 1 million.

Recently, the Nasdaq index rebounded strongly, touching 14,000 points, close to the historical high. The Nasdaq index is considered to have a correlation with Bitcoin's movements.

The ever-expanding broad money is the root cause of the extreme prosperity of the entire financial market. Taking the US M2 as an example, it has skyrocketed from US$16.1 trillion in April 2020 to US$19.7 trillion in February this year, an increase of over 3 trillion a year dollars.

In the past 12 months, it is also the fastest growing period of M2 in the United States, as shown in the figure below.

In this regard, Ren Zeping, chief economist of Soochow Securities, said at the first macro strategy report meeting on the return to the capital market that the growth rate of M2 in the United States and the growth rate of broad money in the United States are the highest in 20 years, and they are surprisingly high. This is why the stock market has risen, the housing market has risen, commodity prices have risen, including gold, and why Bitcoin has hit new highs since last year? The fundamental reason is that we have ushered in the flood of dollar liquidity.

To sum up, whether it is the issuance of stablecoins/the number of stablecoins on exchanges, or the substantial increase in Bitcoin holdings by institutions, all of this can be attributed to the substantial increase in currency liquidity in major economies around the world, which is important for the limited number of Bitcoins. As far as currency is concerned, it is the biggest benefit.

Tags：

Tron