Weekly Report

2nd June 2021

Continuous Policy Impacts

Abstract: Due to the unknowns in detailed policies to be implemented, there was a general wait-and-see attitude. Market sentiment has been sluggish. Overseas market trends need ongoing attention.

  • Total market value increased. Last week, the total market value of digital assets recovered slightly from US$1.38 trillion to US$1.46 trillion. Bitcoin fluctuated violently in a range of US$35,000 to US$40,000.
  • Most of the top 100 digital assets gained. Last week, among the top 100 digital assets, 35 witnessed decline, while 65 staged growth.
  • Bitcoin’s hash rate rose. The average hash rate of Bitcoin grew slightly week-on-week. The weekly average hash rate was about 149.80EH/s, up 3.46%.
  • Bitcoin’s on-chain activity declined and Ethereum’s on-chain activity increased. The Bitcoin network saw a decrease of 6.21%, 0.67% and 20.6% in average number of transfers, number of active addresses and average transfer amounts, respectively. In the Ethereum network, the average number of on-chain transactions fell 6.27%, with the number of active addresses and average on-chain transaction amounts down by 3.56% and 24.9% respectively.
  • Stock exchanges posted a combined 38.4% decline in turnover. Last week, turnover on the 10 exchanges tracked by us decreased by 38.4% week-on-week. Binance moved down by 34.9%. Bitfinex, Bitstamp and Coinbase all recorded a decrease of 60.7%, 53.2% and 40.5%, respectively.
  • Open position in futures fell to US$11.1 billion. Last week, turnover of Bitcoin futures market decreased 45.9% week-on-week, with open position down to US$11.1 billion.
  • Bitcoin and stablecoin rose to US$100 billion. Last week, turnover of USDT increased by US$2 billion and that of USDC increased by US$8.1 billion.
  • Domestic policies continued to cast impacts. Last week’s market focus was on further policies for mining proposed by the country. Sichuan Energy Regulatory Office of National Energy Administration will hold a forum on cryptocurrency mining, covering the impact of cryptocurrency mining on hydropower curtailment in Sichuan and the return of hydropower consumption by power exchange centers.. In addition, the Inner Mongolia Development and Reform Commission issued “Eight Measures to Resolutely Combat and Punish Cryptocurrency ‘Mining'” for public comment, and these policies have increased market uncertainty. While there was some pullback from the big dive seen in the previous week, the industry still adopted more of a wait-and-see attitude, especially for the implementation of detailed policies. Also for overseas development, the US core inflation data (PCE) rose further, which may cause future rate hikes. The impact of domestic policies was relatively greater than that of overseas policies this week. In the secondary market, the turnover of both spot and futures declined last week which a quick rebound is not likely to be expected, and will more likely hover and stay low for some time.


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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