Global assets in the fight against the epidemic: BTC rose by more than 12% to become the world's best

Analyst | Carol

Produced by | PANews

During the 2020 Spring Festival, the fight against the epidemic was launched across the country. Affected by the COVID-19 pandemic, the Shanghai Composite Index opened 8.42% lower on the first day of the Year of the Rat, setting a record low in nearly 23 years. By the close of the day, the Shanghai Composite Index fell 7.72%, the Blockchain 50 Index fell 8.41%, the blockchain sector fell 9.16%, and nearly 3,200 stocks in the Shanghai and Shenzhen stock markets hit the daily limit.

In 2019, against the backdrop of loose monetary policy, all types of assets around the world achieved positive returns, with the CSI 300 and crude oil achieving annual returns of over 30%. In contrast, the start of the global economy in 2020 was not optimistic.

This year's Spring Festival BTC rose by more than 12%, the highest in nearly five years

Except for the A-shares which were closed during the Spring Festival, all other assets in the world were open. According to statistics, only 3 of the 17 major assets/indices in the world rose during the Spring Festival in 2020, with BTC having the highest increase. According to the Coin Metrics corrected currency price data, BTC rose by 11.84% from January 23 to January 31, and its performance was far better than other targets. The second largest was COMEX gold (New York gold), which rose by 2% during this period, and the USD/CNY (offshore) rose by 1.02%.

In addition, the remaining 14 major assets/indices all fell to varying degrees. Among them, the 10-year US Treasury yield fell the most, falling 13.06% from January 23 to 31. The declines of LME copper (London copper), Brent (crude oil) 04, A50 futures, and US crude oil 03 also exceeded 7%. The US dollar index fell less, only 0.32%, and the Nikkei 225 Index, Nasdaq Index, and French CAC40 Index also fell less than 3%.

According to the "Bitcoin and Gold Correlation Research Report" released earlier by Gate.io Research Institute, gold and the US dollar index and other important stock indices (Dow Jones Index, Nikkei 225 Index, French CAC40 Index, etc.) mainly show a negative correlation, and BTC shows a statistical conclusion of gold-like safe-haven properties. When economic market prices fluctuate greatly, gold and BTC have safe-haven properties, and BTC has better returns.

Before the Spring Festival, PAData analyzed the market trends of BTC during the Spring Festival (the national holiday from New Year's Eve to the sixth day of the first lunar month) in the past nine years (2011-2019). The results showed that during the Spring Festival in the past nine years, Bitcoin rose seven times and fell twice, with an average return of 6.02%, the highest return of 26.54% (2011), and the highest return in the past five years was 9.48% (2017).

However, around the Spring Festival this year, perhaps affected by the local conflict between the United States and Iran and the COVID-19 epidemic in China, the market's risk aversion sentiment was high. BTC rose from US$8,423 on January 24 to US$9,509 on January 30, an increase of 12.89%, exceeding the historical level for the same period. It was the year with the highest profit from holding coins during the holidays in the past six years.

BTC fell slightly after the holiday and is in a sideways adjustment phase. On February 2, BTC closed at $9,339, down 1.79% from January 30. In the next four months or so, BTC will continue to be affected by the reduction in production.

BTC trading volume was generally stable during the Spring Festival, with the first and second days being the lowest.

There is a saying circulating in the cryptocurrency circle that domestic investors are so bored that they cannot leave their homes due to the epidemic, but the A-share market is closed, so they can only trade Bitcoin.

Whether it is the data performance of on-chain transaction volume or the data performance of secondary market transaction volume, there is no significant difference during the Spring Festival compared with normal days, except for the first and second days of the Chinese New Year. In general, BTC transaction volume during the Spring Festival was relatively stable except for the first (January 25) and second (January 26) days of the Chinese New Year, with no significant difference before and after the festival.

According to Coin Metrics’ corrected on-chain transaction data, the average daily on-chain transaction volume of BTC during the Spring Festival this year was about $1.649 billion, of which only $976 million and $918 million were recorded on the first day (January 25) and second day (January 26) of the Lunar New Year, respectively, which was about half of the daily average. However, on the third day (January 27), the on-chain transaction volume of Bitcoin had recovered to $1.929 billion.

Judging from the trading volume in the secondary market, BTC's trading volume showed a mild "U"-shaped curve from before the Spring Festival to the Spring Festival. According to CoinMarketCap's statistics on daily trading volume, from January 21 to January 26, BTC's average daily trading volume was low, averaging about US$23.115 billion, forming the bottom of the "U"-shaped curve. Among them, the first day of the Chinese New Year (January 25) and the second day of the Chinese New Year (January 26) were only US$19.647 billion and US$22.177 billion, respectively, slightly lower than the daily level. However, BTC trading volume has gradually recovered since then, reaching US$25.771 billion on the sixth day of the Chinese New Year (January 30), the last day of the national holiday.

It is worth noting that after the opening of the A-share market, thousands of stocks hit the limit down, and the market was in a liquidity crisis. However, the secondary market trading volume of BTC was relatively stable and did not drop sharply. Among them, the trading volume on February 2 and February 3 exceeded 30 billion US dollars.