At the beginning of 2020, affected by the “new crown” epidemic, the resonance between BTC and the global financial market has intensified, and it has not been spared from the plunge. On March 12, the currency price fell below $5,000, which was almost cut. This coincided with the eve of the third reduction in production on the Bitcoin network. The sluggish currency price and rising computing power reduced the miners’ “production reduction expectations”. Subsequently, DeFi liquidity mining emerged, and BTC was tepid, hovering at the $10,000 mark. Entering November, Grayscale, the world’s largest digital currency asset management company, substantially increased its positions in BTC. The institution’s exit added a fire to the market. BTC rose rapidly, and on the last day set a new historical high at a new high of US$29001.72.
Behind this dramatic trend, what changes have taken place in the BTC trading market and on-chain activities, and what trends do they imply? PAData will review BTC’s 2020 in a panoramic view through the analysis of 8 sets of (market/on-chain) data.
Data review:
The currency price rose by 302% throughout the year, and the daily average currency price volatility was approximately 4.32%, showing a significant unilateral upward trend.
The annual average daily transaction volume of BTC was approximately 33.02 billion U.S. dollars, and the total annual transaction volume exceeded 12 trillion U.S. dollars.
A total of 433 large-value transactions were conducted at 523 “giant whale” addresses throughout the year. The stronger the certainty of the currency price upward movement, the less active the “Whale” large transactions.
The 12 exchanges within the monitoring range accumulated an outflow of approximately 353,700 BTC.
In the second half of the year, Grayscale’s BTC trust fund scale expanded from US$3.555 billion to US$17.475 billion, increasing its holdings by more than US$13.9 billion.
The average number of daily active addresses throughout the year was approximately 895,900, which was increasing in tandem with the currency price.
The total number of on-chain settlements throughout the year exceeded 112 million, which was about 7 million fewer than in 2019, which was basically the same.
The overall supply of BTC has grown slowly, and the new supply this year has decreased by 225,970 compared with 2019.
The number of non-current or extremely low-current BTC increased by approximately 1.0718 million.
The transaction fees on the chain for the whole year totaled over 26,300 BTC (326 million U.S. dollars), the currency standard increased by about 32.83% compared with 2019, and the dollar standard increased by about 108.97% compared with 2019.
After the third production cut, the average daily fee income of miners as a percentage of total income soared from 1.78% before the production cut to 9.42%.
The currency price rose by 302% throughout the year, and the average daily trading volume exceeded US$33 billion
In 2020, BTC will still be the best performing asset in the world. According to data from CoinMarketCap, BTC rose from approximately US$7,200 (January 1) to approximately US$29,002 (December 31) in 2020, an annual increase of 302.81%, far exceeding other mainstream financial assets. For example, according to Wind’s statistics, the traditional asset with the highest increase in 2020 is COMEX silver (New York Mercantile Exchange silver futures), which rose by about 35.2% for the year, followed by LME copper (London Futures Exchange copper futures) and CSI 300 The index rose by about 24.3% and 23.7% respectively for the year.
Although the BTC market at the beginning of the year was affected by the global financial market turmoil, the currency price plummeted by more than 37% on March 12, but after November, the currency price rose rapidly, rising by 111.12% in two months, and closed at $29001.72 on December 31. It hit a new high during the year, with an annual average currency price of approximately US$11,116. It is worth noting that within half a year after the third production cut this year, the currency price rose by 76%, which was much higher than the 37% increase in the currency price during the half year after the second production cut.
This year, the high growth of the BTC price coexisted with low volatility, which showed a significant unilateral upward trend. According to statistics, BTC’s annual average daily currency price volatility is about 4.32%. Among them, March was affected by the “Black Swan” event, and the currency price fluctuated greatly, with an average monthly volatility as high as 10.05%. The currency price was the most stable in July, with an average monthly volatility of only 2.46%.
In the secondary market, the average daily trading volume of BTC this year was approximately 33.02 billion U.S. dollars, and the total annual trading volume exceeded 12 trillion U.S. dollars. From the distribution point of view, February to May and September to December of this year were the peaks of the two transactions, while June to August was the trough of transactions. In the whole year, 23-day single-day trading volume exceeded US$50 billion, of which the single-day trading volume on March 12, December 17 and October 4 exceeded US$70 billion.
The relationship between volume and price throughout the year is not completely corresponding. On the whole, the upward trend of currency prices is consistent and significant, but the transaction volume is distributed in a wave. Especially from June to September this year, the currency price has risen steadily, but the transaction The volume has fallen.
Under the background that BTC continues to increase in volume and refreshes the highest price in history at a price of $29001.72, the market is generally optimistic that BTC will continue its upward trend in 2021. One of the basis for judgment is MVRV. The index is an index that reflects the preference of long-term investors, representing the ratio of the market value of circulation to the realized market value. If it is greater than 1, it means that the current price is higher than the overall value consensus of market participants, and the price is overestimated, and the larger the value means The higher the degree of overvalued pricing, and vice versa. As of December 31, the MVRV index was approximately 3.141, which was lower than the previous high of 4.717 on December 7, 2017.
And judging from the average value of MVRV over the years, the average value this year is about 1.762, which is lower than the 2.705 in 2017. This means that the level of asset bubble caused by the upward trend of the currency price this year has decreased compared with the previous round of bull market. This is BTC in 2021. The continued rise in the country provides a good foundation.
The “giant whale” is not active, with only 433 large transactions throughout the year
The trading trends of large coin holders have attracted attention because they are considered to affect the market trend. If the non-exchange addresses with a year-end balance greater than 2000 BTC are defined as “giant whale” addresses, there are about 523 addresses in total. A total of 433 single large-value transfers of more than 2000 BTC were made to these addresses throughout the year, with an average of about 36 per month.
If combined with the currency price trend throughout the year, it can be found that when the certainty of the currency price increase in the fourth quarter, the larger the “whale” transactions are less active, only 56 times. Especially in December, when the currency price reached a new high, almost all “giant whales” were “sleeping”, with only 3 large transactions in a month, the least in the whole year.
52.58% of the 523 “Giant Whale” addresses with large transactions have only one large transaction, and 43.40% of the addresses have two large transactions, and 3 or more large transactions have occurred The “giant whale” is only 4.02%. Therefore, even for “giant whales” with large transactions, trading activities throughout the year are not active.
From the perspective of transaction volume, the non-exchange “Giant Whale” traded approximately 6.21 million BTC in the whole year, which was equivalent to 58.142 billion U.S. dollars, converted according to the currency price on the day of the transaction.
According to statistics, this year’s “Giant Whale” has an average monthly large transaction volume of 517,700 BTC. Among them, the first quarter was the quarter with the largest volume of “Giant Whale”, with a total of 3.369 million BTC, which was US$28.328 billion at the transaction price. , The fourth quarter was the quarter with the smallest volume of large transactions for the “Giant Whale”. Only 724,000 BTC were traded, which was a contract of 1.055 million US dollars at the transaction price.
The annual net loss of BTC on the exchange exceeded 350,000
Major exchanges are still the main places for BTC transactions. As of December 31, the total BTC in exchange wallet addresses exceeded 2.0512 million BTC. Among them, Coinbase has the largest balance, with a total of more than 893,500 BTC, accounting for approximately 43.56% of the entire BTC trading market. Secondly, the balances of OKEx, Binance, and Huobi all exceed 150,000 BTC. Like Coinbase, they are the main global BTC trading markets.
However, judging from the annual net inflow of BTC in exchanges, the accumulated outflow of about 353,700 BTC from the 12 exchanges within the monitoring range this year. Among the major exchanges, the balances of OKEx, Poloniex, Binance and Coincheck are in a state of net inflow. OKEx has the largest net inflow, reaching 153,200 BTC. The balances of the remaining eight exchanges are in a state of net outflow, among which Huobi and Bitfinex have more net outflows, both exceeding 100,000 BTC.
The number of deposit and withdrawal addresses on the exchange is proportional to the number of users to a certain extent. The more deposit and withdrawal addresses mean the higher the probability of the number of users. Judging from the changes in the number of deposit and withdrawal addresses of various exchanges throughout the year, the number of users participating in BTC transactions has increased this year. Among them, the number of deposit and withdrawal addresses of Coinbase and Gate.io increased the most, reaching 103.17% and 94.30% respectively. In addition, the deposit and withdrawal addresses of Huobi, Poloniex, OKEx and Binance also increased by more than 25%.
As of December 31, the 12 exchanges within the monitoring area had a total of 11.5927 million deposit and withdrawal addresses. Coinbase and Binance are the two exchanges with the largest number of deposit and withdrawal addresses, reaching approximately 3.779 million and 2.410 million respectively. Secondly, the number of deposit and withdrawal addresses of Bittrex and Huobi is also around 1 million.
Grayscale increased its holdings by US$13.9 billion in half a year, and the GBTC OTC premium continued to rise
One of the most noteworthy market trends this year is the continued entry of institutional funds. The market generally believes that continuous institutional deposits have promoted the formation of this bull market. Among them, the large organization that has attracted much attention is Grayscale. According to the position data released by Grayscale, the scale of Grayscale’s BTC trust fund expanded from US$3.555 billion to US$17.475 billion in the second half of this year, an increase of 391.57%, which is equivalent to a nearly 5-fold increase. Especially in the fourth quarter, Grayscale continued to increase its holdings on a large scale to increase the size of the BTC trust fund by 263.13%.
The premium of GBTC’s share of GBTC in the secondary market also showed an upward trend in the second half of the year. The OTC premium of GBTC on July 1 was about 10.77%, and the OTC premium of GBTC on December 31 was already about 17.00%. The overall increase was about 7 percentage points, but if the annual maximum premium increase is calculated, the highest premium rate of 40.20% on December 21 was nearly 34 percentage points higher than the lowest premium rate of 6.21% on September 23. The volatility of the GBTC OTC premium level is significantly higher than the volatility of the currency price in the spot secondary market in the second half of the year.
The annual average daily active addresses on the chain exceeded 890,000, an increase of 25% over the previous year
From the statistical point of view, the average number of daily active addresses this year is about 895,900, and as the currency price continues to rise, the number of daily active addresses on the chain also shows a clear upward trend throughout the year. Among them, users were the most active throughout the fourth quarter, with the quarterly number of daily active addresses reaching 1.0131 million, an increase of 37.63% from the 736,100 daily active addresses in the first quarter. Among them, the highest number of daily active addresses in a single month reached about 1.0714 million in December. In addition, the number of daily active addresses in November also exceeded 1 million, which is about 1.0258 million.
This year, the number of daily active addresses on the chain has reached a small high in recent years. According to statistics, the number of daily active addresses this year has increased by about 25.11% compared with 2019, which has increased by about 18.54% compared with 2017 in the last bull market period, and has nearly tripled from 2015 five years ago.
Moreover, the change in the number of daily active addresses on the chain is basically consistent with the overall trend of the currency price throughout the year. As the market prospers, the number of active addresses on the chain also increases. In 2017, 2020, and 2021, with better revenue performance, the number of daily active addresses on the chain is relatively large.
The number of active addresses on the chain is a window to observe the actual active users. As far as possible, the two are not exactly the same, but the trends of the two are largely similar, that is, if the number of active addresses on the chain increases, to a large extent This means that actual active users are also increasing.
112 million on-chain settlements throughout the year, with a settlement amount exceeding 536 million BTC
On-chain settlement efficiency is an important indicator to measure the development and future applications of blockchain. According to statistics, the number of on-chain settlements this year has exceeded 112 million, which is about 7 million less than in 2019. The drop is about 6.25%, which is basically the same. The average monthly on-chain settlements throughout the year was 9,379,700, of which July was the month with the most on-chain settlements, reaching 10.158 million. Moreover, similar to the situation in 2019, there is no statistical correlation between the number of on-chain settlements this year and the currency price, that is, it is not the fluctuation of currency prices that affect the number of on-chain settlements.
The total settlement amount this year is approximately 536 million BTC, an increase of approximately 43 million BTC from the approximately 517 million BTC settled in 2019, an increase of approximately 8.32%. If the changes in the BTC currency price are taken into account and converted according to the daily currency price, the total cumulative settlement amount this year is equivalent to 6.51 trillion U.S. dollars, which is an increase of about 2.58 trillion U.S. dollars from the 3.93 trillion U.S. dollars settled in 2019, an increase of about 65.65. %.
The average daily settlement amount throughout the year is approximately 1.467 million BTC, which is approximately US$17.802 billion in daily currency conversion. Judging from the trend of the amount of settlement on the chain throughout the year, after September, the amount of settlement on the chain has expanded significantly. The daily settlement amount on October 20, September 17 and October 22 all exceeded 4 million BTC. In addition, there are 41 days in the whole year for daily settlement of more than 2.5 million BTC.
The new supply of BTC throughout the year is 450,000, and the overall liquidity is reduced
As of December 31, 2020, the total supply of BTC is approximately 18.586 million, with an additional supply of 450,000 BTC throughout the year, and the inflation rate is 2.49%. Affected by the third production cut, the new supply this year has decreased by 225,970 compared to 2019. In the past five years, the overall supply of BTC has increased slowly, and the growth rate has slowed year by year.
glassnode uses the ratio of accumulated outflow and accumulated inflow of BTC within a certain time frame of the holding entity as an indicator to measure the liquidity of BTC. If this ratio is less than 25%, it is regarded as non-current or extremely low-current BTC. If this ratio is Between 25% and 75% are considered liquid BTC, if the ratio is higher than 75%, it is considered highly liquid BTC.
According to monitoring, this year’s non-current or very low-current BTC has increased by approximately 1.0718 million, and its share in the total supply has increased by approximately 4%. On the other hand, both liquid and highly liquid BTC have all decreased. The number of circulating BTCs decreased by approximately 215,600 throughout the year, and the percentage of the total supply also decreased by approximately 1.3 percentage points. The highly liquid BTC dropped by 432,900 in the whole year, and its percentage of the total supply decreased by about 2.7 percentage points. On the whole, the liquidity of BTC has decreased this year.
The annual mining output exceeded 5.011 billion US dollars, and the proportion of fee income increased significantly
This year, the total transaction fees on the chain exceeded 26,300 BTC, which is equivalent to about 326 million U.S. dollars based on the daily currency price. The currency standard has increased by about 32.83% compared with 2019, and the dollar standard has increased by about 108.97% compared with 2019.
This year, the average daily on-chain transaction fee is approximately 71.88 BTC, which is approximately US$890,100 when converted to daily currency prices. However, the distribution of handling fees throughout the year is divided by the third reduction in production, showing a big difference.
Before the third production cut (excluding the day of production cut), the average daily transaction fee was approximately 32.59 BTC, which is approximately 261,900 US dollars converted at the daily currency price. After the third production cut (including the day of the production cut), the average daily transaction fee rose to 94.05 BTC, an increase of 188.59% compared to before the production reduction. If converted according to the daily currency price, the average daily transaction fee is approximately US$1.2445 million, which is equivalent It was 4.75 times higher than before the reduction in production. There are a total of 10 days of single-day transaction fees and more than 200 BTC throughout the year. Among them, the transaction fees on November 3, October 31, October 30, and November 5 all exceeded 260 BTC. High level.
Although transaction fees have increased significantly after production reduction, this still cannot compensate for the decrease in total income of miners. According to statistics, the cumulative total income of BTC miners this year is about 479,600 BTC, which is about 5.012 billion U.S. dollars based on the daily currency price. The currency standard and the dollar standard “shrunk” by 31.26% and 3.78% respectively from 2019.
The average daily mining income throughout the year is approximately 1,311 BTC, which is equivalent to USD 13.693 million, converted according to the daily currency price. The change trend throughout the year is also based on the third reduction in production. Before the third reduction in production (excluding the day of the reduction in production), the average daily mining income was about 1,862.42 BTC, equivalent to 15.1421 million US dollars. After the third reduction in production (including the reduction in production) On the same day), the average daily mining income was about 1003.04 BTC, equivalent to US$12,891,700. The currency standard and the dollar standard fell by 4.37% and 14.86% respectively from before the production cut.
It is worth noting that the average daily mining income under the dollar standard price in December was approximately 22.323 million US dollars, the highest in the whole year. The average currency price of the month was approximately 21983 US dollars. In addition, the average daily mining income under the USD standard in November was approximately US$17,364,800, which was equivalent to the average daily mining income in February before the production cut. The average currency price of the month was approximately US$16,646. This means that according to the current state of the network, only when the currency price is higher than $16,000, the average daily mining revenue may be comparable to that before the production cut.
Affected by the substantial increase in transaction fees, the proportion of on-chain transaction fees in mining revenue has also expanded from an average of 2.8% last year to an average of 6.69% this year, an increase of nearly 4 percentage points. Especially after the third production cut, the average daily fee as a percentage of income soared from 1.78% before the production cut to 9.42%. There are 11 days when the commission accounted for more than 20%. Among them, the five days of October 29, October 30, October 31, October 28 and November 2 accounted for more than 25% of the commission. .
This year, the computing power of the entire network has continued to rise moderately (+35.91%), but the number of transactions (-6.25%) and block output (-1.86%) have decreased compared with last year. Under such circumstances, the handling fee has increased significantly It has become the main way to improve the marginal profit of mining. If the currency price stabilizes at a high position next year, the proportion of transaction fees in mining may continue to rise.
