Observation: Ethereum’s market value surpasses Citigroup, domestic and foreign regulations are tightened, how do you view the undercurrents of digital assets?

The "boom" in the digital asset industry continues, and the energy is overflowing.

Since June 2020, with the entry of institutions and the rise of various DeFi tracks, Ethereum 2.0 has been launched. Ethereum has ushered in many positive factors, and its price has been rising all the way. In January of this year, it achieved many breakthroughs and triggered discussions among "industry leaders": "Ethereum has achieved the mission that Bitcoin has always been"? "ETH 2.0 can increase the inflation rate arbitrarily, but Bitcoin will never increase the inflation rate"?

At the same time, domestic and foreign supervision has tightened . The new US government took office, and the first female Treasury Secretary Janet Yellen showed special attention to the regulation of digital assets. Shenzhen also issued a risk warning today . The relationship between industry development and regulatory security is still a difficult common issue.

Ethereum's market value surpasses Citigroup. Who is the locomotive of digital assets?

January 2021 is the "collective honeymoon period" for all ETH believers.

On January 25, the price of Ethereum continued to rise, reaching a historical high of $1,475.41, while pushing the total market value above RMB 1 trillion, reaching a maximum of RMB 1.095 trillion, surpassing Wells Fargo, Citigroup and Morgan Stanley. They shouted that faith can really be fulfilled.

Overall, there are three reasons for the current ETH market situation .

The first is the so-called "institutional fever" . Since June last year, institutional investors represented by Grayscale and PayPal have accelerated their entry and purchased digital assets such as Bitcoin and Ethereum, injecting strong potential energy into the industry and continuously releasing it as growth momentum.

Secondly, as Compound triggered a "liquidity mining" craze, DeFi has developed rapidly , and excellent projects have emerged in DEX, mortgage lending, asset agreements and other tracks. The total market value of DeFi projects on the Ethereum chain has also continued to rise, reaching a record high of US$38.11 billion on January 24. The prosperity of DeFi feeds back to Ethereum, forming a virtuous self-circulation.

(Data source: OKLink)

Finally, Ethereum 2.0 was officially launched on December 21 last year, which also brought optimism to the market. As of January 26, the Ethereum 2.0 contract address has pledged 2,833,122 tokens . The industry is generally optimistic about this upgrade. If the Ethereum 2.0 vision is successfully launched, it will bring innovation to DeFi projects from the bottom up and promote industry upgrades.

(Data source: OKLink)

Ethereum’s outstanding performance has triggered some interesting discussions within the industry about the “number one in the industry” .

As the leader of the digital asset industry and the top horse in this bull market, Bitcoin cannot show weakness. Its developer Udi Wertheimer tweeted a diss at Ethereum, saying, " ETH 2.0 arbitrarily increases ETH's inflation rate , but Bitcoin will never increase its inflation rate."

Justin Bons is a staunch Bitcoin bear. He is the co-founder of Cyber ​​Capital (a digital asset management company based in Amsterdam). On January 25, he tweeted to continue to bearish Bitcoin, " Bitcoin is like an NFT , with only pure speculation and subjective value. Ethereum has achieved the mission that Bitcoin has always been - currency, SoV and trustless application platform, collaborative value ."

Who is the "digital asset locomotive"? Perhaps it is Bitcoin, perhaps Ethereum, or perhaps in the next few years, a new project will emerge with hope.

The first female U.S. Treasury Secretary takes office, increasing pressure on digital asset regulation

With the new US government coming to power, there have also been some changes in financial regulation .

On January 25th local time, after a vote by the U.S. Senate, Janet Yellen was nominated and became the first female Treasury Secretary in U.S. history .

(Janet Yellen)

At the Senate confirmation hearing, Janet Yellen expressed special concern about the regulation of digital assets. " Law enforcement officials responsible for regulating money laundering and other illegal financial activities should pay special attention to cryptocurrencies . Many cryptocurrencies are used for illegal financing. The government needs to curb illegal money laundering activities through cryptocurrency platforms and cooperate with federal banks and other institutions to implement effective supervision of cryptocurrencies."

Janet Yellen’s concerns about the lack of regulation of digital assets are well-founded .

In 2020, there were nearly 300 fraud and ransomware attacks involving digital assets, causing economic losses of more than US$3.2 billion; there were 170 hacker attacks, causing economic losses of US$2.33 billion; there were 60 DeFi attacks, with losses of more than US$250 million; stablecoins such as USDT were also used on a large scale for money laundering and other activities.

Taking the theft of 1,400 BTC from a Github user as an example, with the help of the OKLink on-chain SkyEye transaction map , we can see that on-chain asset transfers usually involve multiple addresses, and multiple transactions have gone through multiple layers of decentralized transfers, coin-mixing service systems, and flowed into various KYC-free service agencies and dark webs, weaving a dense and complex transaction network . Since these on-chain addresses are anonymous, it is technically difficult to lock and recover assets .

(Data source: OKLink)

Not only individual investors will become victims of such incidents, but industry institutions are also not immune. Once an incident occurs, it is often difficult to recover the losses due to the complex path of on-chain asset transfer and the difficulty of technical tracking.

At the same time, domestic regulatory precautions are also being upgraded. On the day of publication, the Shenzhen Local Financial Regulatory Bureau issued another risk warning to combat the trend of "virtual currency speculation" and clean up and rectify its illegal activities.

In the new year, the relationship between industry development and regulatory safety remains a difficult issue . This is not only related to the property safety of individual investors and the steady and orderly development of the industry, but is also crucial to maintaining national financial security. At present, the sustainable development of the digital asset industry still has a long way to go, and it urgently needs the collaborative efforts of multiple parties such as self-exploration within the industry and improvement of supervision outside the industry. (OKLink Blockchain )