Weekly Report

26th May 2021

Changes beyond Expectations

Abstract: More pressure has been imposed on Bitcoin mining and trading at the policy level. Future developments will depend on the implementation of the rules and regulations. Overseas market trends need attention.

    • Total market value declined. Last week, the total market value of digital assets fell significantly from US$2.17 trillion to US$1.38 trillion, down 36.6%. Bitcoin plunged to as low as around US$31,663 on 19 March, followed by a pullback to around US$35,000 at which to hover.
    • Most of the top 100 digital assets fell. Last week, among the top 100 digital assets, 92 witnessed decline, while 8 staged growth.
    • Bitcoin’s hash rate decreased. The average hash rate of Bitcoin declined significantly week-on-week. The weekly average hash rate was about 144.79EH/s, down 13.55%.
    • Bitcoin’s on-chain activity declined and Ethereum’s on-chain activity increased. The Bitcoin network saw a decrease of 15.82%, 17.32% and 4.50% in average number of transfers, number of active addresses and average transfer amount, respectively. In the Ethereum network, the average number of on-chain transactions shrank by 12.35%, with the number of active addresses and average on-chain transaction amount decreasing 11.35% and 3.92%, respectively.
    • Stock exchanges posted a combined 5.7% increase in turnover. Last week, turnover on the 10 exchanges tracked by us rose by 5.7% week-on-week. Binance grew 1.7%. Bitfinex, Bitstamp and Coinbase diverged in performance with a 64.0% increase, a 30.3% increase and a 1.6% decline, respectively.
    • Open position in futures fell to US$11.4 billion. Last week, turnover of Bitcoin futures market increased 49.3% week-on-week, with open position down to US$11.4 billion.
    • Bitcoin and stablecoin rose to US$89.7 billion. Last week, turnover of USDT increased by US$1.55 billion. BUSD increased by US$870 million, and USDC remained unchanged.
    • Changes beyond expectations. Market focus for last week shifted from overseas back to domestic situation. The market witnessed serious concerns about its two fundamental businesses, being mining and exchanges due to the crackdown on Bitcoin mining and trading by the top-level financial conference as well as risk warnings on virtual currency trading from three major industry associations, and so digital currencies fell sharply. Despite market rebound, the industry still adopted more of a wait-and-see attitude, especially for current uncertainties about mining and some exchange C2C rules. There will be a rally, but buying in dip also requires some patience. And overseas market movements will be a good angle for observation.


      Digital Currency Market Capitalization Change:

      Source: HashKey Capital Research, Coin360


      Bitcoin Futures Daily Trading Volume:

      Source: HashKey Capital Research, The Block

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