Bitcoin network transaction volume hits record high, Grayscale Bitcoin Trust has been fully unlocked | Industry Weekly Report

OKEx Intelligence Bureau's weekly industry report helps you quickly review industry dynamics and clarify industry trends.

Table of contents:

Market Overview

Organization and company news

Crypto asset market

DeFi/NFT/Layer2 News

Industry Voice

Market Overview

According to CoinGecko data, as of 16:00 on August 27, 2021, the total market value of the crypto market was US$2,085.5 billion. The USDT premium rate was -0.01%, and the average over-the-counter price was ¥6.48. The market sentiment index was 71, and the level was greedy.

According to OKEx data, as of 16:00 on August 27, 2021, BTC was temporarily reported at $47,395.7 and OKB was temporarily reported at $20.229. The ratio of long and short positions of OKEx BTC contracts was 0.99, and the total position of BTC contracts was $1.747 billion.

1. Organization and company dynamics

1. MicroStrategy once again purchased 3,907 Bitcoins for $177 million in cash

On August 24, MicroStrategy CEO Michael Saylor announced on Twitter that MicroStrategy purchased another 3,907 bitcoins at a price of $45,294 per bitcoin for $177 million in cash. As of August 23, 2021, MicroStrategy owns 108,992 bitcoins with a total value of $2.918 billion and an average price of $26,769 per bitcoin.

[Interpretation] MicroStrategy has increased its holdings of a total of 17,142 bitcoins since the "May 19" market decline. It is still the listed company with the largest number of bitcoins, and its holdings account for 0.57% of the total circulation of bitcoins.

2. Grayscale Bitcoin Trust has been unlocked, with the last batch unlocking 58 coins on August 25

According to Bybt data, starting from August 26, Grayscale Investments Bitcoin Trust (GBTC) will no longer be unlocked (GBTC does not open new investments). The last GBTC unlocking occurred on August 25, with a quantity of 58. Note: Grayscale Bitcoin Trust shares have a 6-month lock-up period rule. A total of nearly 34,900 bitcoins were unlocked from July 13 to 20.

[Interpretation] According to OKLink data, as of August 26, Grayscale GBTC's secondary market premium rate was -15%. If no new Bitcoin trust shares are unlocked, its GBTC secondary market premium rate may narrow.

3. PayPal starts offering crypto services to UK customers this week

PayPal is expanding its crypto services to the UK, allowing customers to buy, hold and sell four cryptocurrencies on its platform, including BTC, ETH, LTC and BCH. This is the first expansion of PayPal's crypto products outside the United States. The process will begin this week and should be available to all eligible customers in the next few weeks. Customers must have verified their identity to qualify. PayPal business accounts are not supported. Cash withdrawals are not yet supported.

[Interpretation] This is the first international expansion of PayPal's crypto services, which is of great strategic significance. This move also injects a certain amount of confidence into the crypto industry and may stimulate further adoption of crypto assets in the mainstream market in the future.

4. US SEC documents show that more than 30 Morgan Stanley funds hold a large number of GBTC shares

According to Bitcoinist on August 26, a document recently disclosed by the U.S. Securities and Exchange Commission (SEC) shows that Wall Street giant Morgan Stanley has been investing heavily in Bitcoin. Instead of investing directly, the company reportedly chose to access Bitcoin through the regulated Grayscale Bitcoin Trust (GBTC). Well-known market analyst MacroScope first reported the news and cited documents from the U.S. Securities and Exchange Commission reporting that Morgan Stanley holds Grayscale Bitcoin Trust in its multiple portfolios. Among them, Morgan Stanley's Insightfund holds approximately 928,051 shares of the trust, equivalent to approximately 700 bitcoins, worth $36 million. It is reported that as early as April 2021, Morgan Stanley applied to seek Bitcoin exposure in its 12 institutional funds.

[Interpretation] Most banks and institutions will choose to indirectly participate in the blockchain wave by investing in trust funds, ETFs, blockchain company equity, blockchain concept stocks, etc. In addition to further reducing compliance issues, it also reduces the threshold and risk of direct investment in encrypted assets. It can be seen that more and more traditional institutions are rushing into the blockchain field, and their attitude towards the encrypted world is becoming increasingly objective and open.

2. Crypto Asset Market

1. Research report: Cryptocurrency market will more than triple by 2030

According to a report by Allied Market Research on August 25, CoinDesk, the cryptocurrency market is expected to grow at a compound annual growth rate of 12.8% from 2021 to 2030. The global cryptocurrency market will reach $4.94 billion by 2030, more than three times the estimated size of $1.49 billion in 2020. Allied Market said that the main driving force will be the increase in demand for international remittances and greater transparency in global payment systems. More than two-thirds of the industry's size in 2020 was attributed to mining operations, and the sector is expected to maintain this dominance until 2030. Allied Market predicts that the cryptocurrency industry in the Asia-Pacific region will be the fastest growing due to increased competition from an increasing number of exchanges.

[Interpretation] The size of the cryptocurrency market will more than triple by 2030, which means that the upper limit of crypto assets remains high.

2. The 7-day average transaction volume of the Bitcoin network reached $188 billion, setting a historical record

On August 27, Bitcoin once again created a new milestone. The 7-day average transaction volume of the Bitcoin network reached 188 billion US dollars, setting a historical record, which means that about 20% of the Bitcoin market value has moved. The current 7-day average of the number of BTC transferred by the Bitcoin network is 3.6 million. Recently, there have been more large BTC transactions of 10K-12K on the Bitcoin network, which may be caused by changes in exchange wallets. If there are many small transactions, it means that more individual investors are transferring their Bitcoin on the network. In addition, Bitcoin is trying to break through the $50,000 resistance level and is currently hovering in the $47,000-48,000 range.

[Interpretation] In contrast to the record high daily average trading volume of Bitcoin, the global search volume for "Bitcoin" on Google Trends is at a nearly nine-month low. The number of "Bitcoin" queries this month is comparable to the number recorded in December last year, when the price of Bitcoin began to exceed $19,000. At the same time, after reaching a four-year high in January 2021, the global search volume for "buy bitcoin" fell to a 10-month low. The reason for this anomaly is that retail investors suffered heavy losses in the "May 19" crash, and market sentiment has not fully recovered.

3. Report: Exchange ETH reserves continue to decline, traders prefer to hold ETH

According to a report by blockchain analysis firm CryptoQuant, ETH reserves on exchanges fell by 26.29 million ETH year-on-year to 19.22 million ETH, indicating that traders prefer to hold tokens. CoinMetrics' metric for tracking the total number of ETH deposits on exchanges shows that ETH deposits by traders across all exchanges fell 21.11% year-on-year, from 413,772 ETH to 326,408. Over the past 30 days, ETH deposits have fallen sharply by 47.81%, indicating that many investors have higher expectations for long-term prices.

[Interpretation] On the one hand, the ETH reserves of exchanges have decreased, and on the other hand, the speed of Ethereum destruction is also increasing rapidly. On August 26, the daily destruction volume hit a new high of more than 8,000. According to the data from OKEx Chain Master, as of August 27, the total destruction of Ethereum exceeded 107,600.

4. Chainalysis report: DeFi’s mainstream adoption is still in its early stages

According to CoinDesk on August 24, blockchain data company Chainalysis reported that the mainstream adoption of decentralized finance (DeFi) protocols is still in its early stages relative to the broader crypto industry. The Chainalysis report "Global DeFi Adoption Index" found that while DeFi adoption rates in emerging and developed markets have increased significantly over the past 18 months, most of the growth has occurred in countries and regions with higher incomes and more professional investors and traders.

The report states that DeFi adoption is “primarily driven by experienced crypto traders and investors seeking new sources of alpha in innovative new platforms, even as we weight the index to favor grassroots adoption.” While DeFi has attracted larger investors, the industry needs to do a better job of attracting smaller retail investors.

[Interpretation] In fact, the current DeFi is still a place where a small number of wealthy people monopolize the wealth of the oligopoly. On the one hand, the overall number of DeFi users is relatively small, and on the other hand, the high transaction fees also keep most small and medium-sized investors out. However, this phenomenon is also reasonable. After all, finance is always a game for a small number of rich people. GameFi is the only one that can break this phenomenon, because in GameFi, participants do not need to pay huge financial costs, but they need to pay huge time costs. GameFi is essentially Proof of Human Work.

3. DeFi/NFTs/Layer2 Dynamics

1. Chainalysis releases global DeFi adoption index: the United States leads, China ranks fourth

According to Fintech Times, crypto analysis company Chainalysis released the Global DeFi Adoption Index, with the United States, Vietnam, Thailand, China, and the United Kingdom ranking in the top five. The index ranks 154 countries and regions and consists of three indicators: the value of on-chain cryptocurrencies received by DeFi platforms, weighted by per capita purchasing power parity; the total retail value received by DeFi platforms; and personal deposits on DeFi platforms. Chainalysis pointed out that many of the top-ranked countries are countries where there is now or previously a large amount of cryptocurrency value flow, usually middle- and high-income countries, or countries with developed cryptocurrency markets, especially strong professional and institutional markets. In addition to the above five countries, Western European countries also rank relatively high. The report pointed out that from April 2019 to about June 2020, the vast majority of network traffic for DeFi protocols came from North America, and Western Europe began to increase its share around September 2019. Around June 2020, traffic from other regions increased, especially Central Asia and South Asia, and the total value sent to DeFi platforms began to grow significantly. China is already one of the countries with the largest DeFi transaction volume, but the share of DeFi protocol network traffic in East Asia is still relatively low compared to centralized cryptocurrency services.

[Interpretation] Recently, a survey mainly targeting banking executives found that most people believe that Bitcoin and digital assets may replace legal currencies such as the US dollar in the next 5 to 10 years. I think the probability of this view happening is not high, but the impact of DeFi on the centralized financial world will be obvious. In addition, "DeFi China is already one of the countries with the largest DeFi transaction volume", the word "one of" could have been removed.

2. CryptoPunks’ total transaction volume hit a record high of $900 million

On August 26, according to the latest data, the total transaction volume of NFT collectibles CryptoPunks broke through US$900 million, setting a historical high. At the time of writing this article, it was US$903 million, the number of traders was 4,568, and the sales volume was 17,356. Currently, in the vertical field of NFT collectibles, Axie Infinity has the highest total transaction volume, which is about US$1.63 billion, the number of traders exceeds 470,000, and the sales volume exceeds 3.61 million; CryptoPunks ranks second, and NBA Top Shot ranks third (total transaction volume is US$667 million).

[Interpretation] I believe many people are asking "When will this NFT wave pass?" The answer to this question cannot be based on the perspective of "hype Jpg pictures", otherwise it would be too narrow. To cite just a few examples, the recent "Budweiser began to get involved in the NFT market and purchased the ENS domain name Beer.eth for 30ETH", "Budweiser changed its Twitter avatar to "Tom Sachs Rocket Factory" NFT work", "Visa announced that it had purchased CryptoPunk and the transaction volume increased significantly", etc., all illustrate a problem. After receiving huge attention, NFT has become synonymous with trends, brand power, traffic, fashion, youth, and personality. It can be said that NFT is a cultural movement similar to the Renaissance, which is unstoppable.

3. Aave, Compound, and MakerDAO borrowed $21 billion, a record high

Dune data shows that the total amount of deposits available for use as collateral from the three leading lending projects, Aave, Compound and MakerDAO, has exceeded $42 billion. This figure is second only to the historical high of $43.7 billion around May 12, 2021. Previously, the figure had fallen to $27 billion at the end of May. More data shows that the total amount of borrowing from the above three projects has reached $21 billion, a record high.

[Interpretation] It can be considered that the strong demand for loans is one of the reasons for the market recovery, and it can also be considered that the market recovery is one of the reasons for the hot lending market. In countless market crashes, these lending applications built on Ethereum have also been tested by the market and have become the most outstanding financial regulation tools in the blockchain ecosystem. The real financial world needs banks, and the blockchain world needs this kind of decentralized bank that can run automatically and does not require huge maintenance projects. This is an indispensable part of the decentralized revolution.

4. Data: OpenSea’s daily transaction volume exceeded US$200 million for the first time, setting a new record

The latest data from Dune Analytics shows that the world's largest NFT trading platform OpenSea had a single-day transaction volume of US$209 million on August 24, setting a new record. So far, OpenSea's total transaction volume in August is about US$1.891 billion, 5.8 times the transaction volume in July.

Opensea was founded in 2018, with a cumulative transaction volume of over $2.7 billion. The first time Opensea’s daily transaction volume exceeded $100 million was on August 21, which took three years. It took only three days to go from $100 million to $200 million.

[Interpretation] At present, OpenSea has become the undisputed king of the Ethereum ecosystem. According to Tokenterminal data, in the past seven days, the top three protocols in terms of fees paid by users for using project services are Ethereum, Axie Infinity and Opensea. Among them, Opensea's fees are 46.6 million US dollars. According to data from only 30 days, the revenue of Opensea's protocol is 127.3 billion US dollars. Dune data also shows that Opensea has developed rapidly in August, and the fees generated by its protocol are about 6.5 times that of July.

5. Brazilian police will auction the Lamborghini sports car of Cláudio Oliveira, the mastermind of the crypto fraud case, and the proceeds will be distributed to the relevant victims

The Lamborghini Gallardo LP 560-4 confiscated from the so-called "Bitcoin King" Cláudio Oliveira will be temporarily used by the Brazilian Federal Police, U.Today reported on August 25, citing Brazilian media Globo. The federal police will display the sports car at exhibitions and educational events, and then auction it, and the proceeds will be distributed to the relevant victims.

Earlier news, in early July, Cláudio Oliveira, president of Brazilian financial management company Bitcoin Banco Group, was arrested by Brazilian police on suspicion of obtaining at least 1.5 billion Brazilian reals (about US$300 million) in crypto asset fraud from more than 7,000 victims.

[Interpretation] Everything can be NFT.

4. Industry Voice

1. Bloomberg: Axie Infinity turns unemployed people into crypto traders

On August 26, Bloomberg published a long article introducing the blockchain game Axie Infinity, saying that it is helping those who have lost their jobs due to the epidemic become crypto traders. Axie Infinity's daily active users have increased from 30,000 in April this year to more than 1 million in August, most of whom are from developing countries hit hard by the epidemic, including the Philippines, Brazil and Venezuela. The price of AXS has soared in the past two months, in stark contrast to the overall economy of the Philippines, where about one in eleven people are currently unemployed. From its launch in 2018 to July 1 this year, Axie Infinity only generated $21 million in revenue for Sky Mavis, but in the past two months, it has brought in $485 million in revenue. There are signs that new players do not fully understand how to protect their gains. Crypto analysts believe there is a huge opportunity for cryptocurrency education here, and many players have never been exposed to cryptocurrency, never had a wallet, and never transferred money in the blockchain. (Bloomberg)

[Interpretation] What Axie Infinity is doing is "common prosperity", which allows those who originally could not afford to eat enough food and buy medicine to have enough food and afford medicine, and improves the lives of those who can afford to eat and buy medicine...

2. YouTube Gaming Director: It is "self-evident" that NFT will take over the gaming industry

According to Zycrypto, recently, Ryan Wyatt, the head of YouTube Gaming, tweeted that he is optimistic about NFT. He explained that in the long run, the gaming industry will turn to a gaming model that uses blockchain and NFT. This model will also promote the open market for in-game digital assets and bring liquidity to digital projects that currently lack liquidity. He also pointed out that it is "self-evident" that NFT will take over the gaming industry. It is reported that Ryan Wyatt is not only the head of YouTube Gaming, but also the head of global gaming cooperation at Google and the head of YouTube's virtual and augmented reality business.

[Interpretation] GameFi=game+NFT+DeFi=entrance to the metaverse=infinitely broad imagination space. GameFi is also a dimensionality reduction attack on the traditional game model, which is bound to have different responses.

3. CFTC Commissioner Stump condemns the question of whether cryptocurrencies are securities or commodities as "oversimplified"

According to Coindesk, Dawn Stump, a member of the U.S. Commodity Futures Trading Commission (CFTC), said on Monday that the top commodity regulator in the United States mainly regulates derivatives markets rather than spot commodity markets.

In her statement, Stump described a "grossly inaccurate oversimplification" that digital assets are either securities or commodities and fall under the jurisdiction of the CFTC. If they are considered securities, they will be regulated by the SEC.

[Interpretation] I agree with Stump's point of view. Cryptocurrency is not just a security or a commodity. For example, the popular NFT is first of all a cryptocurrency, but NFT can be given more attributes, such as brand attributes, copyright attributes, cultural attributes, and asset attributes. In addition, the most expensive NFT can be infinitely split. With so many attributes in one, it is of course impossible to simply think that NFT is a security or a commodity. This is too rough.

4. Mayor of Jackson, Tennessee, USA: As the Federal Reserve continues to print money, the price of Bitcoin will continue to rise

According to Bitcoin.com on August 24, Scott Conger, mayor of Jackson, Tennessee, said that as the Federal Reserve continues to print money, the price of Bitcoin will continue to rise. He believes that Bitcoin is "definitely the monetary system of the future."

[Interpretation] Correct answer! The Federal Reserve’s balance sheet is currently as high as 8 trillion, and quantitative easing is still ongoing. It would be abnormal if Bitcoin did not rise!

5. "Rich Dad Poor Dad" author: Bitcoin and silver are the best investments

On August 24, Robert Kiyosaki, author of Rich Dad Poor Dad, tweeted again to sing the praises of Bitcoin, saying that Bitcoin and silver are the best investment targets. He said: "Bitcoin is thriving, gold is stagnant, silver is 50% below its historical high, and the US dollar is falling. Silver is the best investment target with high potential and lowest risk. Bitcoin has the largest room for growth. As the US dollar depreciates, Bitcoin and silver are the best investments."

[Interpretation] I don’t know whether silver is worth as much as bitcoin, but Bitcoin is definitely the best target for resisting hyperinflation.