Weekly Report

23rd June 2021

Policy Impacts Exacerbated Market Volatility

Abstract: The stricter policy on domestic cryptocurrency has caused greater market volatility. Participants have become more cautious with a certain sense of panic.

  • Total market value declined. Last week, the total market value of digital assets fell slightly from US$1.58 trillion to US$1.43 trillion. Bitcoin plunged from its peak of approximately US$ 40,000 to about US$33,000 this week
  • Most of the top 100 digital assets fell. Last week, among the top 100 digital assets, 86 witnessed decline, while 14 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 118.14 EH/s, down 21.5%.
  • Bitcoin’s on-chain activity rose and Ethereum’s on-chain activity also increased. The Bitcoin network saw a 0.73% decrease, 6.93% decrease and 0.60% increase 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 decreased 1.92%, with the number of active addresses down by 6.74% and average on-chain transaction amount up by 10.21%.
  • Stock exchanges posted a combined 26.3% decline in turnover. Last week, turnover on the 10 exchanges tracked by us decreased by 36.3% week-on-week. Binance moved down by 27.5%. Bitfinex, Bitstamp and Coinbase all recorded a decrease of 22.3%, 28.5% and 17.5%, respectively.
  • Open position in futures fell to US$11.9 billion. Last week, turnover of Bitcoin futures market declined by 3.2% week-on-week, with open position down to US$11.9 billion.
  • Bitcoin and stablecoin rose to US$104.1 billion. Last week, turnover of USDT increased by US$40 million, USDC increased by US$640 million, and BUSD increased by US$80 million.
  • The market has become more cautious. Last week Sichuan Province issued and implemented a ban on mining, and Alipay, Postal Savings Bank of China, Industrial and Commercial Bank, China Construction Bank, People’s Bank of China, and Agricultural Bank of China all issued announcements on prohibiting participation in Bitcoin and other virtual currency transactions, showing a further tightening of domestic regulatory policies. The Fed’s change of attitude hinted at tapering and also a rate hike, however, this was not the main factor affecting the recent currency prices and requires continuous attention. In the secondary market, the continued decline seen in the turnover of both spot and futures last week showed that the market was still more cautious or even was somewhat in panic, and fluctuations at this level will be expected for a period of time in the future.

     

    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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