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In this edition we’ll review the Bitcoin markets and summarize the cryptocurrency regulation frenzy that took place during the holiday season

Originally published on Jan 5

It’s been an exciting couple of weeks, with mixed news such as a large advisory stating they sold half of their Bitcoin holdings and the OCC who just announced they will allow banks to use and issue stablecoins.

It’s started

If you believe Bitcoin will keep to its parabolic history, the famous Google Trends chart is encouraging: It’s at last showing extra public interest in Bitcoin, at 42% from the 2017 — Bitcoin-mania peak:


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A summary of the facts around the possible international cyber war that’s going on as we write and of course an overview the last two weeks in the cryptocurrency markets as Bitcoin hit all time highs

With Bitcoin’s price breaking out to all time highs (congrats!) after two weeks of ranging between 16,000 and 19,000, the derivatives markets keep expanding, with record open interest in Bitcoin contracts reaching $8.2 B (seen below). Trading volumes were not as extreme during this breakout.


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How do on-chain derivatives work? And how decentralized are they? Our first in-depth overview of this new financial derivatives technology includes all the details you’ll need about Opium Protocol and UMA Network

Trading Tencent stock derivatives for USDT or DAI in a non-custodial environment has a much more wide-ranging appeal than swapping blockchain native $SUSHI tokens for $YAM tokens, and that’s why derivatives built with blockchains are so interesting. Most of the new non-custodial derivatives platforms are quite new, but they might be exactly what gives application type blockchains financial relevance in the long term.

In this series of posts we’ll be reviewing and explaining in detail decentralized derivative, starting with the projects which are live on the Ethereum network and its incumbents subsequently.

Decentralization reality check

Decentralization is removing a central point of control from a system and replacing it with many points of control, without downgrading the integrity of the system. …


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Efficient Frontier biweekly newsletter: Why Bitcoin’s future depends more on Generation Z than the current establishment + market wrap

Why does it feel like one year in crypto-land is like 5 years of normal life? The news pace is just staggering, and endorsement and news of institutional interest keep piling in while Bitcoin’s price is hovering close to its all time dollar heights.

Though this price run has taken a pause, the bigger picture looks positive for cryptocurrency, not only due to the endorsements by the American establishment, but also because of the dry metrics:

The number of addresses with a non-zero balance, as well as addresses with over 1,000 Bitcoin are both at all-time highs:


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Where are we in Bitcoin’s bull cycle? And will we know when the top is in? Using the objective sentiment indicator MVRV we got some answers. Then we looked at the state of the crypto derivatives market and found only all-time high charts

Rebooting perspective: almighty realized cap metric

With this massive Bitcoin run up, re-calibrating the long term perspective is called for. To get perceptive, let’s look at MVRV (Market Value to Realized Value), realized value and MVRV Z-score. All these related metrics use on-chain information unique to our industry to create objective sentiment indicators.

Realized value looks at the blockchain and Bitcoin’s price history to check at what dollar price each coin was last transferred on the blockchain. This shows its psychological fiat value, which is often the price it was bought at. A coin which moved on the blockchain yesterday at midnight is valued at $18,400, a coin that last moved on January 1st 2020 is valued at $8,300. Averaging the realized price of all 18.5 million Bitcoins gives us an estimated realized market capitalization. Different companies adjust this metric differently but everyone agrees it’s breaking records. …


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Source: Hong Kong Bitcoin Association

Why is Iran’s central bank into Bitcoin? Record breaking on-chain and trading statistics and everything about the new Hong Kong cryptocurrency regulation

Bitcoin’s price touched $16,000 per coin last week, breaking another record for 2020 while regulators around the world keep moving to regulate cryptocurrency exchanges.

Where in the world are Huobi’s executives?

On Monday a 2020 record of 26,000 Bitcoins were withdrawn from Huobi, one of Asia’s most popular exchanges, while rumors circulated of the exchange’s executives being arrested.


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Reporting on the IMF’s CBCD panel & global KYC-roadmap plus on-chain metrics fun as Bitcoin hits $13,000 for the first time 2020

First, a quick update

According to GlassNode, 98% of all Bitcoin UTXOs (a proxy for Bitcoin accounts) are currently in a state of profit after Bitcoin broke to 2020 highs, currently touching the $13,000 mark.


In this edition: Complete breakdown on the BitMEX situation, market commentary, derivatives and on-chain metrics review

On the September 25th KuCoin exchange was hacked for $281 million in cryptocurrency.

On October 1st BitMEX exchange’s executive team was indicted by the US government.

On October 5th notorious cryptocurrency influencer John McAfee was arrested in Spain for tax evasion and illegal market manipulation.

On October 6th the UK FCA banned cryptocurrency derivatives.

But Bitcon’s price barely reacted or acknowledged these dramatic stories. And then this morning, excitement about another Nasdaq-listed technology company (Square Inc) buying Bitcon’s for its corporate treasury seemed to push Bitcoin’s price above $11,000.

So should speculators run for the hills? Or rejoice in the impressive strength of Bitcoin’s price? Perhaps both! So you’re welcome to stretch out in your luxury underground bunker (in the safety of your home) and enjoy our new…


The wild cryptocurrency markets are still breaking various records and we’re here to update on the latest records and news. Plus, expert views on the confusing economic time we are facing globally

In the last two weeks Bitcoin kept gaining acceptance, with a Swiss county accepting it for taxes, cryptocurrency exchange Kraken winning a banking charter in the state of Wyoming and of course, Microstrategy’s CEO, Michael Saylor, putting his comapany’s entire balance sheet into Bitcoin and claiming he’s going to hold on to it for 100 years. “There has never been an example of a $100B monster digital network that was vanquished once it got to that dominant position…This has already won, it’s been tested.” he said in his recent interview.

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ETH/BTC ratio

Since our last edition Bitcoin went from around $10,400 up close to $11,200, then down to $10,150 and is rising to $10,700 at the time of writing. The mood in the markets has definitely shifted away from the DeFi euphoria. …


Covering the last two exciting weeks in the crypto markets from the SushiSwap drama to miner fees, plus Zack Voell’s unique opinion on the future of DeFi

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“Just some more bull market volatility….”

Two weeks ago, when we last met, Bitcoin was at $11,500. In the next few days it rose to around $12,000, before quickly dropping by $1,500 on September 3rd to around a low of $10,020.

About

Efficient Frontier

Leading research & algorithmic trading firm for the cryptocurrency markets efrontier.io

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