The Block analyst Larry Cermak, in comments and charts, depicted the evolution of the crypto industry after the end of the previous rally in late 2017 – early 2018.
1/ It’s hard not being optimistic when looking at what’s been happening in crypto in the last few months. Narratives are important but data always tells the story much better. I spent a long time to put together this thread to illustrate the growth so please spread it!
— Larry Cermak (@lawmaster) March 8, 2021
According to the analyst, the monthly trading volume on the spot market stands at $1 trillion. The figure has tripled since the 2017 peak.
Trading-volume dynamics on trusted Bitcoin exchanges. Data: The Block.
Trading volume on decentralized exchanges (DEX) reached $73 billion — about 7% of the centralized platforms’ figure. Uniswap holds the leading position with about a 50% share.
Trading-volume dynamics on DEXs. Data: The Block.
Unlike the events of three years ago, institutional investors played a larger role in the rally.
In February, web traffic to exchange sites was 20% below January 2018 levels. Crypto-related activity on Twitter has declined. The number of search queries for the word “bitcoin” to date has not reached the levels recorded at the peak of the previous rally. The Ethereum-related metric has surpassed the levels of the past market peak.
Similarity to the 2017 bull market is evident in Bitcoin’s dominance both in trading volume (three times higher than the second-largest cryptocurrency) and in the liquidity metric by the same magnitude.
Open interest in Bitcoin futures over three years has quadrupled — to $15 billion. Trading volume in this segment ($2 trillion monthly) is roughly double that of the spot market.
Open interest dynamics in Bitcoin futures. Data: The Block.
Cermak also drew attention to the role of the Bitcoin options market in forecasting price levels for the first cryptocurrency. This has become possible thanks to increased activity in long-dated contracts. In his words, open interest in options is approaching the levels of the Bitcoin futures market (~$10 billion).
Crypto assets in Grayscale Investments trusts reached 655,500 BTC and 3.17 million ETH. The firm generates around $70 million per month in investor fees. Due to competition and market corrections, the premium of the Bitcoin Trust to the spot price of the first cryptocurrency has fallen into negative territory.
On-chain data
On the Bitcoin network there are 1.1 million active addresses daily, versus 500 thousand on Ethereum. The daily value transferred amounts to $10 billion, versus $7 billion respectively. Daily miner revenues in both blockchains have risen to $50 million.
Seven-day moving average of daily value transferred on Bitcoin and Ethereum networks. Data: The Block.
Total market supply of stablecoins exceeded $50 billion. The volume of transactions with stablecoins in February reached $380 billion — three times higher than a year ago.
DeFi and NFT
In the DeFi sector, total value locked (TVL) stood at $45 billion. The bulk of TVL is accounted for by DEX ($20 billion) and lending projects ($17.5 billion).
The year 2021 was marked by a NFT boom. In February, weekly trading volume reached $200 million.
NFT marketplace NBA Top Shot registered 350 thousand users. CryptoPunks had only 1,200, but with high NFT prices it also retains a leading position in this segment.
Trading volume on NFT marketplaces. Data: The Block.
From February 4 to March 4, NFT trading volume reached a record $480 million.
For a roundup of last month’s key events, see the ForkLog overview ForkLog ‘February 2021 in numbers: Bitcoin capitalization at $1 trillion, Binance Smart Chain surge and NFT ecosystem’.
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