OKEx Investment Research Weekly Report | Ebang International will be listed on the US stock market this week, and Bitcoin's volatile market is expected to end

Written by: OKEx Investment Research

• Ebang International will be listed on the Nasdaq in the United States on June 26

• The total market value and locked market value of DeFi projects hit new highs, and Compound surpassed Maker

• CME Bitcoin options grow rapidly, market share approaches 25%

Hot News

[Ebang International will be listed on the Nasdaq in the United States on June 26]

After submitting its prospectus to the U.S. Securities and Exchange Commission (SEC) in April, the IPO of Bitcoin mining machine manufacturer Ebang International has entered the countdown. On June 17, Ebang International updated its new prospectus to the U.S. Securities and Exchange Commission (SEC), clearly stating that it will be listed on the Nasdaq and increase the upper limit of fundraising from US$100 million to US$125 million.

Yibang International also announced its unaudited financial results for the first quarter of 2020 in the new version of the prospectus. The prospectus shows that as of March 31, 2020, the revenue in the first quarter was US$6.4 million, a year-on-year increase of 6.1%; the expenditure was US$5.9 million, a year-on-year decrease of 3.9%; the net loss reached US$2.5 million, while the net loss in the first quarter of 2019 was US$600,000.

Futu NiuNiu released the subscription information of Ebang International's new shares, showing that the mining machine manufacturer Ebang is expected to go public on June 26, with an issue price of US$4.5-6.5, a total of 19,323,600 shares issued, and a total market value of US$590 million to US$850 million. The securities underwriters of Ebang International are AMTD International, Reuters Financial and Prime Capital.

OKEx Research believes that the three largest Bitcoin mining machine manufacturers in China are Bitmain, Canaan Creative, and Ebang International. Once listed, it means that Ebang International is the second Bitcoin mining machine stock to be successfully listed after Canaan Technology. From the performance point of view, Ebang International's net loss is further expanding, from a net loss of US$600,000 in the first quarter of 2019 to US$2.5 million in the first quarter of 2020. This is mainly due to the global market panic caused by the large-scale outbreak of the new crown epidemic in March. Investors frantically sold various financial assets including Bitcoin, causing a sharp drop in Bitcoin prices at the end of the first quarter. The company's increase in the maximum fundraising amount against the background of further expansion of losses also reflects to a certain extent that Ebang International's short-term financing needs are more vigorous.

Data Tracking

【 DeFi project total market value and locked market value both hit new highs, Compound surpasses Maker 】

According to data from DeFiMarketCap, as of June 22, the total market value of DeFi tokens was close to US$6.5 billion, of which COMP is currently the DeFi token with the highest market value, with a total market value of approximately US$3.06 billion, accounting for about half of the total market value of DeFi tokens, far exceeding MakerDAO's market value of US$510 million, leaving the second place far behind in just a few days.

Figure 1: Total market value of DeFi projects and TOP5 projects - DeFiMarketCap

According to the data on the DAppTotal.cn DeFi special page, the screenshot is from DAppTotal. Since June 15, the locked value trend of various DeFi projects, led by Compound, has risen rapidly, among which the Compound project is the most prominent. As of June 21, the total locked funds of 38 DeFi projects counted exceeded US$1.6 billion, of which Compound's locked value was US$486 million, surpassing Maker's US$419 million, ranking first among DeFi projects.

Figure 2: DeFi project locked value distribution trend in the last 30 days - DAppTotal

OKEx Research believes that the main reason for the sharp rise in the value of Compound's locked positions is the influence of its "lending is mining". The number of its core locked tokens has shown a significant growth trend, among which ETH locked positions have increased from 293,000 to 963,000, an increase of more than 2 times, BAT locked positions have increased from 7.9 million to 88.04 million, an increase of more than 10 times, and other locked tokens such as REP and USDC have also shown a good growth momentum. With the surge in Compound's governance token COMP, the market value of DeFi has continued to increase, and investors have entered the DeFi field. However, the activeness of Defi projects will inevitably give rise to the market's investment enthusiasm for DeFi projects again, but we still need to pay attention to distinguishing the pros and cons of projects and not blindly follow various projects.

[CME Bitcoin options grow rapidly , market share approaches 25%]

Following the futures contract trading, the options market has developed in full swing. The Chicago Mercantile Exchange Group (CME Group) CME also launched regulated options for Bitcoin futures on January 13 this year.

According to the latest data from Skew, the proportion of Bitcoin options provided by the Chicago Mercantile Exchange Group (CME Group) has now risen to 25%. In terms of demand for Bitcoin options, the Chicago Mercantile Exchange is second only to the unregulated Dutch exchange Deribit. The daily open interest of Bitcoin options on the OKEx exchange accounts for 4%, ranking among the top three in the options market.

Figure 3: Total market value of DeFi projects and TOP5 projects - DeFiMarketCap

OKEx Investment Research believes that in terms of options, after a rather dull 4 months, the total amount of BTC open positions on CME has increased more than 10 times since mid-May. In addition, the daily proportion of open interest in OKEx options has also increased compared to the previous period, which shows that institutional investors' demand for Bitcoin options is growing rapidly, and both CME and OKEx have made efforts in market share.

Event Outlook

Table 1: Calendar of important financial events this week - OKEx Research

This week is the Dragon Boat Festival holiday in China. The A-share market will be closed for two days starting from the 25th. In terms of the external market, this week's focus is on Ebang International, one of the three major mining machine giants, which will be listed on the Nasdaq in the United States this Friday.

Market Analysis

Since June 12, when Bitcoin price fell below the 20-day moving average, it has been running below the moving average for several consecutive trading days, and from the perspective of the form, MA20 is horizontal, indicating that the current currency market is still volatile overall. In terms of indicators, the TD indicator has shown green sequences 9 and 13 consecutively, and green sequence 9 again on June 5, indicating that the recent market has seen an increase in the demand for callbacks, which was also verified by the slight callback of the currency price last week. The MACD indicator below has had a dead cross since mid-May, and an undead dead cross in early June, and the fast and slow lines are below the 0 axis, indicating that the current market sentiment has not completely turned bearish.

Figure 4: OKEx BTC/USDT spot price daily candlestick chart - AICoin

In view of the continued weak and volatile trend this week, investors still adhere to the high-level box oscillation operation strategy, carry out appropriate high-selling and low-buying, and continue to wait for the market to have a clearer entry point. In the uncertain market environment, it is also a wise choice to wait and see.

Overall, the listing of Ebang International on the US stock market this week will become a hot topic in the cryptocurrency circle. Under the catalysis of this news, there is a certain possibility that the cryptocurrency market will usher in a change. The recent record highs in the total market value and locked-up market value of DeFi projects also highlight the pursuit of funds for DeFi projects. In terms of options, in addition to Deribit and CME, OKEx is also stepping up its efforts to catch up in terms of market share. This week is the Dragon Boat Festival holiday in China, and it is expected that the market capital side will be affected to a certain extent.

Risk warning: The above content is for reference only and does not constitute investment advice.