Ce diaporama a bien été signalé.
Le téléchargement de votre SlideShare est en cours. ×

Oct 15-Nov 13 2022 On-Chain Digest - Bleeding Out.pdf

Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Publicité
Introduction
After several months of headwinds for the crypto space, the historical collapse of crypto
exchange FTX in ear...
from the noise by providing evidence of trends in network usage and demand. To surface
recent network performance, the Kra...
downtrend has accelerated. Specifically, BTC market share ticked down by -2.4 percentage
points (pp) in the last 30 days an...
Publicité
Publicité

Consultez-les par la suite

1 sur 10 Publicité

Plus De Contenu Connexe

Plus par SGB Media Group (20)

Plus récents (20)

Publicité

Oct 15-Nov 13 2022 On-Chain Digest - Bleeding Out.pdf

  1. 1. Introduction After several months of headwinds for the crypto space, the historical collapse of crypto exchange FTX in early November added fuel to the bear market’s fire. FTX’s crisis began on November 2 when news broke that the firm’s trading subsidiary heavily invested in FTX’s illiquid, native token FTT.1 Binance CEO Changpeng "CZ" Zhao announced several days later that he would offload Binance’s FTT holdings to avoid falling victim to another Terra-Luna death spiral type of situation, which spurred mayhem across the crypto space. Binance announced a non-binding letter of intent to buy FTX a couple of days later, which eased the industry’s panic. However, the deal fell through the next day after Binance conducted due diligence on FTX’s financials. FTX ultimately filed for Chapter 11 bankruptcy in the US on November 11. Though FTX's collapse has negatively impacted many actors in the industry, the true extent of the collateral damage from this debacle is only beginning to surface. Bitcoin (BTC) was uptrending through November 5 but flipped to the downside amid the FTX chaos. Between November 5 and November 13, as the FTX story unfolded, BTC fell -23.4% from $21,300 to $16,310. With this drop, BTC broke through its $19,000 support level with conviction. Ethereum, which transitioned from proof-of-work (PoW) to proof-of-stake (PoS) two months prior via The Merge, saw the price of its native coin ether (ETH) drop by a greater -25% from $1,627 to $1,220 during the same period. The downtrending crypto market coincided with a bleak macroeconomic environment, which continued to weigh on stocks, crypto, and more. Box 1. Macro Snapshot ➤ In year-over-year (YoY) terms, U.S. CPI rose 7.7% in October (down from 8.2% YoY in September), U.K. CPI increased 11.1% in October (up from 10.1% YoY in September), and eurozone CPI jumped 10.7% in October (up from 9.9% YoY in September).2,3,4,5,6 ➤ The U.S. Federal Reserve (Fed) approved a 75 basis-point interest rate hike for the fourth straight month in October, taking the benchmark overnight borrowing rate up to a range of 3.75% - 4.00%.7 ➤ The rate hikes in July, August, September, and October represented the most severe consecutive action since the Fed began using the overnight funds rate as the principal tool of monetary policy in the early 1990s. ➤ The U.S. Dollar Index, which measures the greenback against a basket of other currencies, is up nearly +11.2% so far this year. The U.S. dollar’s strength is due to the Fed’s hawkish monetary policy stance in response to rising U.S. inflation and its potential as a safe haven, given the economic troubles looming in Europe and Asia. ➤ The Russia-Ukraine war adds to global uncertainty, given its impact on commodity markets, particularly food and energy costs. Between the nebulous crypto market and the hectic macroeconomic environment, it is difficult to anticipate what lies ahead. However, on-chain data can help filter out the signal Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 2
  2. 2. from the noise by providing evidence of trends in network usage and demand. To surface recent network performance, the Kraken Intelligence team analyzed several core on-chain metrics across select cryptoassets. On-chain fundamentals Core on-chain metrics for measuring adoption and broader network supply and demand dynamics include crypto market share, transaction fees, daily settlement value, active addresses, transaction count, and circulating supply growth. These measures allow market participants to analyze any blockchain network’s supply and demand dynamics. Note that the on-chain data coverage in this report spans October 15, 2022, and November 13, 2022. Moreover, SOL and AVAX data is missing in some sections due to the lack of available data. Crypto Market Share Looking at the share of total crypto market capitalization (market share) of selected cryptoassets helps describe which assets are experiencing rising or falling demand and, more generally, whether demand is rotating between BTC and altcoins. The total crypto market cap has taken a rough hit this year, dropping by more than $1.5 trillion year-to-date (YTD) (-63%). The last 30 days was no exception as the crypto market dropped by $82 billion (-9%). While BTC demand outperformed altcoins during the bear cycles through July, this trend shifted in August as BTC’s market share started its downtrend. Not only has the market continued to bleed out over the last 30 days, but BTC’s Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 3
  3. 3. downtrend has accelerated. Specifically, BTC market share ticked down by -2.4 percentage points (pp) in the last 30 days and flipped ETH as the worst-performing cryptoasset YTD at -2.3 pp. Prior to this sharp drop, following the FTX debacle, BTC saw a YTD increase in market share. DOGE, this year’s best-performer (+0.4 pp), saw its share surpass ADA this month. Total Daily Transaction Fees Transaction fees represent the cost crypto users are willing to pay to include a transaction on a protocol’s ledger. Note that Figure 2 does not include SOL, ALGO, and ADA because of their static fee rate, which does not respond to varying levels of network congestion. Because transaction fees are a proxy for network demand, we can infer that on-chain demand trended upward in the last 30 days, especially in the case of BTC and DOGE. Unlike market share, DOGE underperformed relative to BTC and ETH on a YTD basis (-59%), but rose the most in the last 30 days (+131%). DOGE’s monthly increase in both market share and daily transaction fees is likely due to Tesla Cofounder Elon Musk’s acquisition of Twitter and endorsements of DOGE.8,9 DOGE rallied on rumors prior to the acquisition and on the confirmation of the news. Though ETH was the best-performing cryptoasset of the cohort YTD, it was the worst-performer over the last 30 days with a minor +0.03% rise. Even BTC, the market’s worst performer, outpaced ETH fees with a +21% uptick. Total Daily On-Chain Volume Daily network transaction volume, also known as on-chain volume, is another strong reference for network demand as it measures the aggregated value of funds market participants are transferring. Precisely, the metric captures the USD equivalent value of a cryptoasset’s on-chain transfer activity during that day. Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 4
  4. 4. ADA on-chain volume remains the best YTD performer of the cohort with a +107% increase. Though ADA also saw +41% rise in the last 30 days, this figure pales in comparison to the +285% and +107% monthly increases in DOGE and ETH, respectively. On-chain volume is yet another metric suggesting that network demand for ETH and DOGE increased. ETH’s rise in volume following the cryptoasset’s rebound after the sell-off after The Merge. Considering that ALGO has seen falling demand throughout the year, it’s perhaps unsurprising that ALGO remained the worst performer both YTD (-76%) and in the last 30 days (-30%). BTC’s falling network demand also showed in on-chain volume as the cryptoasset saw a -1% monthly decline and followed behind ALGO as the second-worst performer YTD (-65%). Network Activity Total Daily Active Addresses Analyzing the number of active addresses per day can help identify network demand from existing and new market participants. This report defines daily active addresses as the total unique addresses active in a network, either as a sender or receiver, that day. Individual addresses are not double-counted if previously Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 5
  5. 5. active. A rising number of active addresses may indicate increasing demand among market participants and vice-versa. Based on our analysis, most of the cryptoassets in the group in Table 4 saw daily active addresses fall YTD except for BTC, which flipped into positive territory after seeing a YTD decrease as of last month. Furthermore, BTC, DOGE and ADA saw increases between +11% and +29% in the last 30 days. ALGO saw the largest drop in active addresses YTD and in the last 30 days, ticking down -65% in 2022 and -24% in the last month. Total Daily Transactions A blockchain’s daily transaction count is another indicator of on-chain demand as it highlights which protocols are experiencing higher levels of relative activity. DOGE transactions led the charge YTD (+23%) despite seeing the biggest decrease in the cohort over the last 30 days (-9%). Notably, the rest of the cryptoassets in the group saw monthly upticks between +4% and +19%. While BTC has struggled across several metrics, it saw the second-largest 30D increase in the group at +21%. Unlike the rest of the on-chain metrics covered in this report, ALGO saw the biggest jump over the last month (+19%). Still, ALGO remained this year’s worst performer in terms of total daily transactions, followed by ADA (-18%) and ETH (-5%). Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 6
  6. 6. Stablecoin Supply Stablecoins are cryptoassets programmed for price stability, typically through pegging the stablecoin to a commodity or currency or regulating its supply through an algorithm. A stablecoin’s supply growth provides a look at on-chain liquidity. The metric tracks the sum of all issued stablecoins at the end of that day. USDT has seen the most redemptions out of all centralized issuers in 2022, with a decrease of ~10.3B in total supply (on ETH, OMNI and TRX). On the other hand, GUSD saw the largest percentage increase, followed by BUSD and USDC, while the rest of the stablecoins have seen YTD declines. GUSD's supply flew past its recent all-time high of roughly $403 million in late October when it signed an agreement with MakerDAO to offer the protocol 1.25% rewards on staked GUSD. As of Nov. 13, MakerDAO had roughly $440 million worth of GUSD on its platform, a more than 10x increase from October. MakerDAO's GUSD supply accounts for roughly 56% of the stablecoin's supply.10 Following news that Binance consolidated holdings of USDC, USDP, and TUSD on its platforms into its native stablecoin, Binance’s BUSD rose the most in nominal terms, increasing by roughly $9 billion in 2022 and $2.1 billion in the last 30 days.11 Circle’s USDC followed with a $2.1 billion YTD rise and a roughly $30,000 monthly loss. Furthermore, USDT continues to give up market share to competing stablecoins. Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 7
  7. 7. Conclusion & Outlook The multi-month bear market picked up the pace with the collapse of FTX in early November. Though the FTX crisis has already negatively affected many areas of the crypto economy, the collateral aftereffects continue to surface. While BTC’s market share fell the most among the group analyzed, the leading cryptoasset saw network demand increase over the last month. Namely, BTC saw rising transaction fees, active addresses, and transaction count. ETH and DOGE took the spotlight over the last 30 days, recording the largest monthly increases in market share and witnessing rising network demand across several on-chain metrics. Thanks to Elon Musk’s latest DOGE endorsements and acquisition of Twitter, the meme coin saw notable increases in transaction fees, volume, market share, transaction count, and active addresses. ETH made a comeback after seeing a downtrend following The Merge on September 15. Specifically, ETH market share outperformed the cohort in the last month, but the cryptoasset also saw positive growth across volume, fees, and transaction count. Still, ETH’s YTD growth remained unimpressive across the board. In the stablecoin world, USDT continued to give up market share to competing stablecoins. GUSD supply surpassed recent all-time highs of roughly $403 million in late October when it signed an agreement to boost GUSD volume on MakerDAO. However, in nominal terms, GUSD’s growth paled in comparison to BUSD’s $2.1 billion rise between October 15 and November 13. BUSD’s supply increase followed news that Binance consolidated holdings of USDC, USDP, and TUSD on its platforms into BUSD. Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 8
  8. 8. Endnotes 1. https://www.coindesk.com/markets/2022/11/12/the-epic-collapse-of-sam-bankman-fried s-ftx-exchange-a-crypto-markets-timeline/ 2. https://www.bls.gov/news.release/pdf/cpi.pdf 3. https://www.bls.gov/news.release/archives/cpi_10132022.htm 4. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflati on/october2022 5. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflati on/september2022 6. https://www.marketwatch.com/story/eurozone-inflation-hit-double-digits-in-october-271 667210511#:~:text=The%20consumer%20price%20index%E2%80%93a,statistics%20ag ency%20Eurostat%20showed%20Monday. 7. https://www.cnbc.com/2022/11/02/fed-hikes-by-another-three-quarters-of-a-point-taki ng-rates-to-the-highest-level-since-january-2008.html 8. https://www.nytimes.com/2022/10/27/technology/elon-musk-twitter-deal-complete.html 9. https://www.coindesk.com/tech/2022/11/01/elon-musk-tweet-sparks-flurry-of-twitter-t hemed-dogecoin-tokens/ 10. https://www.theblock.co/post/173757/gemini-wants-to-boost-gusd-stablecoin-volume-in -makerdao 11. https://news.bitcoin.com/usdcs-market-cap-sheds-close-to-4-billion-in-less-than-20-days- binances-busd-climbs-3/ Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 9
  9. 9. We appreciate your feedback! Please visit https://surveys.kraken.com/jfe/form/SV_2owHIVv5CIa9t7U to participate in a brief survey. For all future Kraken Intelligence content, sign up here. For comments, suggestions, or questions related to this article or future topics you’d like to learn more about, you may also direct your communication to intel@kraken.com or to your account manager. Kraken provides access to 217 crypto assets spanning 658 markets with advanced trading features, industry leading security, and on-demand client service. With the acquisition of Crypto Facilities, Kraken now offers seamless access to regulated derivatives on 5 cryptocurrencies with up to 50x leverage. Sign up for a free account in minutes at www.kraken.com/sign-up. We look forward to welcoming you. For multi-exchange charting, trading, portfolio tracking, and high resolution historical data, please visit https://cryptowat.ch. Create a free Cryptowatch account today at https://cryptowat.ch/account/create. For OTC-related execution services or inquiries, please direct your communication to otc@kraken.com or to your account manager. Disclaimer The information in this report is provided by, and is the sole opinion of, Kraken’s research desk. The information is provided as general market commentary and should not be the basis for making investment decisions or be construed as investment advice with respect to any digital asset or the issuers thereof. Trading digital assets involves significant risk. Any person considering trading digital assets should seek independent advice on the suitability of any particular digital asset. Kraken does not guarantee the accuracy or completeness of the information provided in this report, does not control, endorse or adopt any third party content, and accepts no liability of any kind arising from the use of any information contained in the report, including without limitation, any loss of profit. Kraken expressly disclaims all warranties of accuracy, completeness, merchantability or fitness for a particular purpose with respect to the information in this report. Kraken shall not be responsible for any risks associated with accessing third party websites, including the use of hyperlinks. All market prices, data and other information are based upon selected public market data, reflect prevailing conditions, and research’s views as of this date, all of which are subject to change without notice. This report has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Kraken and its affiliates hold positions in digital assets and may now or in the future hold a position in the subject of this research. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of, or located in a jurisdiction where such distribution or use would be contrary to applicable law or that would subject Kraken and/ or its affiliates to any registration or licensing requirement. The digital assets described herein may or may not be eligible for sale in all jurisdictions. Oct 15-Nov 13 2022 Crypto On-Chain Digest | kraken.com/suscribe/intelligence 10

×