Weekly Report

12th May 2021

The Accommodative Environment and the Alt Season Continued

Abstract: The market expects the Fed to continue accommodative policy. Ethereum keeps going strong. A lot of capital is flowing into new Altcoins, however this could lead to an overheated market.

  • Total market value increased. Last week, the total market value of digital assets rose from US$2.22 trillion to US$2.43 trillion. Bitcoin fluctuated within narrow ranges, hitting the highest at over US$59,000.
  • Most of the top 100 digital assets gained. Last week, among the top 100 digital assets, 61 staged growth, while 39 witnessed decline.
  • Bitcoin’s hash rate rose. The average hash rate of Bitcoin grew significantly week-on-week. The weekly average hash rate was about 179.19EH/s, up 10.18%.
  • Bitcoin’s on-chain activity declined and Ethereum’s on-chain activity increased. The Bitcoin network saw a 9.54% increase, 13.86% increase and 11.17% 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 grew 7.82%, with the number of active addresses and average on-chain transaction amount increasing 6.31% and 86%, respectively.
  • Stock exchanges posted a combined 69.5% increase in turnover. Last week, turnover on the 10 exchanges tracked by us rose by 69.5% week-on-week. Binance moved up by 65.5%. Bitfinex, Bitstamp and Coinbase all recorded an increase of 66.1%, 38.8% and 108.3%, respectively.
  • Open position in futures fell to US$20.7 billion. Last week, turnover of Bitcoin futures market increased 16.6% week-on-week, with open position up to US$20.7 billion.
  • Bitcoin and stablecoin rose to US$84.7 billion. Last week, turnover of USDT increased by US$3.7 billion. USDC increased by US$10.4 billion, and BUSD increased by US$800 million.
  • Loose monetary conditions and the Alt season continued. US Non-farm payrolls for April released last Friday fell far short of market expectation, and the market expects the Fed easing policy continues. Inflation data to be announced this Wednesday will be considered positive to financial markets if it is below expectations. The overall accommodative financial environment is the foundation for keeping crypto assets popular. With Ethereum topped at US$4,000, a slew of Dogecoin knockoffs attracted much attention in the weekend and dwarfed some coins with fundamentals instead. If the market continues to heat up because of the “Zoo series”, it will accelerate the creation of bubbles, while the current performance of centralized exchanges shows that their foremost concern is obviously the competition for capital as these new altcoins are hot spots.

Digital Currency Market Capitalization Change:

Source: HashKey Capital Research, Coin360


Bitcoin Futures Daily Trading Volume:

Source: HashKey Capital Research, The Block