Bitcoin ATH & ETH 2.0 Launch
Every week, IntoTheBlock brings you on-
chain analysis of top news stories in the crypto space. Leveraging
blockchain’s public nature, IntoTheBlock’s machine learning algorithms
extract key data that provide a deeper dive into the major developments in the
industry. This week, we cover Bitcoin’s reach towards a new all-time
high, as well as take a look at the supply locked in
Ethereum after the launch of ETH 2.0. Bitcoin continues to
outperform traditional markets. On Dec. 1, it reached a new all-
time high of over $19,800 based on data from most exchanges. Even though many do
not consider this an all-time high until it surpasses the $20,000 barrier,
Bitcoin has managed to sustain above $18,000 for a longer time than it
did in December 2017. The Bitcoin rally in 2020 has been fueled by
institutional players stepping in, along with the narrative of
digital gold. This has been evidenced by support from large traditional
finance players such as Blackrock, JPMorgan and Fidelity, fintech
companies such as Square and PayPal, and renown macro investors such as Paul
Tudor Jones and Stanley Druckenmiller. More recently, even S&P Dow Jones
Indices announced they will be launching cryptocurrency indices in 2021,
which are expected to keep fueling market participation from financial
institutions. Through on-chain indicators, we can confirm that
institutional interest has indeed been growing throughout 2020.
Large Transactions, which IntoTheBlock categorizes as those of over
$100,000, just hit a new yearly high on Dec. 1. Given the size of these
transactions, the large transaction indicators provide a proxy to
the activity of institutional players and whales. The number of
transactions of over $100,000 recorded on the Bitcoin blockchain
on a daily basis has more than doubled from a year earlier. Furthermore, the
total volume transferred in these has experienced even larger
growth. On Dec. 2, 2019, Bitcoin had an aggregate large
transaction volume of $4.9 billion. One year later, large transaction
volume has grown to over $29 billion, representing an increase of nearly six
times the volume. Along with the high level of activity from
institutional participation, Bitcoin has appreciated remarkably. The new
Bitcoin $20K section in CoinMarketCap tracks the performance of
Bitcoin versus traditional finance indices and gold. As can be seen from
the graph below, Bitcoin’s 169% return has dwarfed the performance of
traditional instruments in 2020. While it is still uncertain when Bitcoin
will manage to surpass the coveted $20k mark, it is evident that this time
support for the cryptocurrency is stemming from large players and not only
retail speculators. Ultimately, the next few months are likely to play a
key role defining the mid- to long-term path of Bitcoin amidst the macroeconomic
environment. On Dec. 1, Ethereum reached a major milestone as it
successfully launched Phase 0 of the multi-year upgrade Serenity, dubbed as ETH
2.0. Phase 0 consists of the launch of the Beacon chain, a proof
of stake chain processing transactions and reaching consensus in parallel to the
legacy proof of work blockchain. Through the proof-of-stake consensus, users
locking their ETH supply on the staking contract are able to receive passive
earnings on top of their deposits.All of these trends have helped push Bitcoin
forward in its latest move. While all of these milestones are certainly
appreciated by holders, all eyes are still set on the coveted $20,000 mark. The
minimum threshold for ETH 2.0 to launch was reached within hours
of its Nov. 24 deadline. The total amount of Ether deposited more than
doubled within the last two days for the target. At the time of writing, the
Beacon chain has reached a total of 2,896 unique depositors, supplying over
980,000 ether. This is now nearly twice the minimum threshold that had been set
for the launch of phase 0 of ETH 2.0. Given the magnitude of the inflows of
ether into the deposit address, liquidity had to decrease elsewhere. In this
case, DeFi protocols have seen a significant reduction in the total
amount of ETH locked in their smart contracts. Throughout the last month, the
total amount of Ether supply locked in DeFi protocols has decreased by
approximately 2 million. This trend accelerated after the ending of UNI
liquidity mining rewards in Uniswap. While a large portion of the Ether
withdrawn from this indicator ended up in the deposit contract, it is likely
that some also ended up in smaller, newer DeFi protocols not accounted for in
the metric. This seems to be the most likely scenario as centralized exchange
inflows for ether remained stable throughout the month. Along with the
positivity from reaching this milestone, Ethereum is also showcasing
strong growth in on-chain metrics. For instance, the total number of daily
active addresses (DAAs) on a given day reached a new three-year high on Nov. 29.
The previous high for DAAs on Ethereum was recorded in January 2018, when
Ether’s price was over $1,000. This points to ether currently being priced at a
discount relative to daily activity on its blockchain. While this is certainly
not the only factor to consider when attempting to value Ethereum, the growth in
DAAs does point to its increasing utility. Similarly, the number of ether
holders has grown consistently, approaching the 50 million landmark. Overall,
the launch of the Beacon Chain marks the beginning of a new era for Ethereum. As
its active developer community works on implementing scalability solutions, on-
chain indicators point to growing activity and optimism for the second largest
crypto-asset. This article contains links to third-party websites or
other content for information purposes only (“Third-Party Sites”). The Third-
Party Sites are not under the control of CoinMarketCap, and
CoinMarketCap is not responsible for the content of any Third-Party Site,
including without limitation any link contained in a Third-Party Site, or any
changes or updates to a Third-Party Site. CoinMarketCap is providing
these links to you only as a convenience, and the inclusion of any link does not
imply endorsement, approval or recommendation by CoinMarketCap of the site or
any association with its operators. This article is intended to be used
and must be used for informational purposes only. It is important to do your own
research and analysis before making any material decisions related to any of the
products or services described. This article is not intended as, and shall not
be construed as, financial advice. The views and opinions expressed in this
article are the author’s own and do not necessarily reflect those of
CoinMarketCap.
Every week, IntoTheBlock brings you on-
chain analysis of top news stories in the crypto space. Leveraging
blockchain’s public nature, IntoTheBlock’s machine learning algorithms
extract key data that provide a deeper dive into the major developments in the
industry. This week, we cover Bitcoin’s reach towards a new all-time
high, as well as take a look at the supply locked in
Ethereum after the launch of ETH 2.0. Bitcoin continues to
outperform traditional markets. On Dec. 1, it reached a new all-
time high of over $19,800 based on data from most exchanges. Even though many do
not consider this an all-time high until it surpasses the $20,000 barrier,
Bitcoin has managed to sustain above $18,000 for a longer time than it
did in December 2017. The Bitcoin rally in 2020 has been fueled by
institutional players stepping in, along with the narrative of
digital gold. This has been evidenced by support from large traditional
finance players such as Blackrock, JPMorgan and Fidelity, fintech
companies such as Square and PayPal, and renown macro investors such as Paul
Tudor Jones and Stanley Druckenmiller. More recently, even S&P Dow Jones
Indices announced they will be launching cryptocurrency indices in 2021,
which are expected to keep fueling market participation from financial
institutions. Through on-chain indicators, we can confirm that
institutional interest has indeed been growing throughout 2020.
Large Transactions, which IntoTheBlock categorizes as those of over
$100,000, just hit a new yearly high on Dec. 1. Given the size of these
transactions, the large transaction indicators provide a proxy to
the activity of institutional players and whales. The number of
transactions of over $100,000 recorded on the Bitcoin blockchain
on a daily basis has more than doubled from a year earlier. Furthermore, the
total volume transferred in these has experienced even larger
growth. On Dec. 2, 2019, Bitcoin had an aggregate large
transaction volume of $4.9 billion. One year later, large transaction
volume has grown to over $29 billion, representing an increase of nearly six
times the volume. Along with the high level of activity from
institutional participation, Bitcoin has appreciated remarkably. The new
Bitcoin $20K section in CoinMarketCap tracks the performance of
Bitcoin versus traditional finance indices and gold. As can be seen from
the graph below, Bitcoin’s 169% return has dwarfed the performance of
traditional instruments in 2020. While it is still uncertain when Bitcoin
will manage to surpass the coveted $20k mark, it is evident that this time
support for the cryptocurrency is stemming from large players and not only
retail speculators. Ultimately, the next few months are likely to play a
key role defining the mid- to long-term path of Bitcoin amidst the macroeconomic
environment. On Dec. 1, Ethereum reached a major milestone as it
successfully launched Phase 0 of the multi-year upgrade Serenity, dubbed as ETH
2.0. Phase 0 consists of the launch of the Beacon chain, a proof
of stake chain processing transactions and reaching consensus in parallel to the
legacy proof of work blockchain. Through the proof-of-stake consensus, users
locking their ETH supply on the staking contract are able to receive passive
earnings on top of their deposits.All of these trends have helped push Bitcoin
forward in its latest move. While all of these milestones are certainly
appreciated by holders, all eyes are still set on the coveted $20,000 mark. The
minimum threshold for ETH 2.0 to launch was reached within hours
of its Nov. 24 deadline. The total amount of Ether deposited more than
doubled within the last two days for the target. At the time of writing, the
Beacon chain has reached a total of 2,896 unique depositors, supplying over
980,000 ether. This is now nearly twice the minimum threshold that had been set
for the launch of phase 0 of ETH 2.0. Given the magnitude of the inflows of
ether into the deposit address, liquidity had to decrease elsewhere. In this
case, DeFi protocols have seen a significant reduction in the total
amount of ETH locked in their smart contracts. Throughout the last month, the
total amount of Ether supply locked in DeFi protocols has decreased by
approximately 2 million. This trend accelerated after the ending of UNI
liquidity mining rewards in Uniswap. While a large portion of the Ether
withdrawn from this indicator ended up in the deposit contract, it is likely
that some also ended up in smaller, newer DeFi protocols not accounted for in
the metric. This seems to be the most likely scenario as centralized exchange
inflows for ether remained stable throughout the month. Along with the
positivity from reaching this milestone, Ethereum is also showcasing
strong growth in on-chain metrics. For instance, the total number of daily
active addresses (DAAs) on a given day reached a new three-year high on Nov. 29.
The previous high for DAAs on Ethereum was recorded in January 2018, when
Ether’s price was over $1,000. This points to ether currently being priced at a
discount relative to daily activity on its blockchain. While this is certainly
not the only factor to consider when attempting to value Ethereum, the growth in
DAAs does point to its increasing utility. Similarly, the number of ether
holders has grown consistently, approaching the 50 million landmark. Overall,
the launch of the Beacon Chain marks the beginning of a new era for Ethereum. As
its active developer community works on implementing scalability solutions, on-
chain indicators point to growing activity and optimism for the second largest
crypto-asset. This article contains links to third-party websites or
other content for information purposes only (“Third-Party Sites”). The Third-
Party Sites are not under the control of CoinMarketCap, and
CoinMarketCap is not responsible for the content of any Third-Party Site,
including without limitation any link contained in a Third-Party Site, or any
changes or updates to a Third-Party Site. CoinMarketCap is providing
these links to you only as a convenience, and the inclusion of any link does not
imply endorsement, approval or recommendation by CoinMarketCap of the site or
any association with its operators. This article is intended to be used
and must be used for informational purposes only. It is important to do your own
research and analysis before making any material decisions related to any of the
products or services described. This article is not intended as, and shall not
be construed as, financial advice. The views and opinions expressed in this
article are the author’s own and do not necessarily reflect those of
CoinMarketCap.
