Weekly Report: A Sharp Decline in the Secondary Market


Weekly Report

26 January 2022

A Sharp Decline in the Secondary Market

Abstract: Last week, the US stocks slumped and the Federal Reserve held a meeting, implying a rate hike and shrinkage of balance sheet as early as March. The military conflict between Ukraine and Russia will also exert pressure on the market. In addition, last week, as MicroStrategys accounting policy was rejected by the SECits share price plunged. The secondary market is in a state of panic and disorder.

  • Total market value declined sharply. Last week, the total market value of digital assets declined from US$2.1 trillion to US$1.6 trillion. Bitcoin tumbled to US$33,000.

 

  • Most of the top 100 digital assets fell. Last week, among the top 100 digital assets, 2 staged growth, while 98 witnessed decline.

 

  • Exchange turnover increased. Last week, turnover on the 10 exchanges tracked by us rose by 26.7%. Binance moved up by 22%. Bitfinex, Bitstamp and Coinbase recorded an increase of 35.7%, 43.5% and 42.8%, respectively.

 

  • Turnover of futures increased. Last week, turnover of Bitcoin futures market grew by 41%, with close position down to US$14.2 billion. Turnover of Ethereum futures market grew by 59%, with open position down to US$6.84 billion.

 

  • Turnover of Dex increased to US$29 billion. The weekly turnover of Dex increased to US$29 billion, up by 90% as compared to last week.

 

  • Turnover of Opensea decreased to US$1.2 billion. Turnover of Opensea decreased to US$1.2 billion, down by 8% as compared to last week.

 

  • The secondary market declined sharply. Last week, market value dropped sharply to around US$1.6 trillion and Bitcoin plummeted below US$35,000. The turnover witnessed a week-over-week growth, mostly attributable to panic transactions, with a 41% and 59% increase in turnover of Bitcoin futures and Ethereum futures respectively. Last Friday, the US stocks slumped when the Federal Reserve met for the first time this year, implying a rate hike and shrinkage of balance sheet as early as March. The expected three rate hikes have been reflected in the bond market. News of the military conflict between Ukraine and Russia will also exert pressure on the market. In addition, last week, the SEC said MicroStrategy did not include impairment loss in its accounting policy, rejecting its said policy, and its share price plunged accordingly. The market volatility index dropped to 13, and the secondary market is in a state of panic and disorder and is expected to continue to hover at low levels under macroeconomic pressure.

 

Digital Currency Market Capitalization Change:

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Source: HashKey Capital Research, Coin360

 

Bitcoin Futures Daily Trading Volume:

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Source: HashKey Capital Research, The Block

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