December 28, 2020

The TIE Weekly Insights (Dec 28)

Highlights from last week:

Market Overview

Despite the holidays, the market was relatively active. The total cryptocurrency market cap increased by +8% this past week, growing from $669B to $731B. Bitcoin’s market cap has surpassed $0.5T for the first time ever as BTC continues to push higher into price discovery. Weekly returns were mostly negative, with a median 7 day return of -4.1%. Bitcoin (+12.1%), Litecoin (+11.3%), and Ethereum (+7.3%) were the only 3 among the majors to perform positively. Investor sentiment has remained positive despite a pullback in prices. Trade volume was up big this past week as every major asset saw double digit increases.

Market Overview

Global cryptocurrency exchange Huobi is making its US comeback after getting approved for a trust license by the Nevada Financial Institutions Division. This license will enable the company to offer custodial and compliance services in the US market early in 2021. XRP had more media headlines this week than DeFi and Ethereum, as the CEO of Ripple warned of an incoming SEC lawsuit.

Trending Topics

Huobi Returns to US After Winning Nevada Trust License

Presidential Advisory Group Weighs in on Regulatory Approach to Stablecoins

Major Movers

On Dec 16th, Bitcoin broke through its previous all-time-high price of $20,000. Since then, BTC has increased by +33%, but how have the other majors performed? The chart below shows the performance of major cryptocurrencies since Bitcoin broke ATH. BTC, ETH, LTC, and BCH have all increased while XRP, LINK, XLM, EOS, and XTZ have decreased.

Major Cryptocurrencies Performance Since BTC ATH

Cryptocurrencies Tweets Per Year

Ever wondered how popular your favorite cryptocurrency is on Twitter? The chart below shows the cumulative sum of Tweets for each of the major cryptocurrencies split by year. So far in 2020 there have been over 10.7M Tweets sent out about Bitcoin, 2.9M about Ethereum, and 1.5M about XRP. 60% of the major assets have grown in popularity (increased in Tweets) compared to 2019, but only 30% have had more Tweets sent out this year than in 2018. Chainlink, Tether, and Tezos are the only 3 to surpass 2018 Tweet volume. Litecoin, Bitcoin Cash, Stellar, and EOS have all decreased in Tweet volume year after year.

Running Total of Cryptocurrency Tweets by Year

Bitcoin Passes Gold in Mainstream Media and Finance Publications

There have been more mentions of Bitcoin in mainstream media and finance publications in December than Gold. This is the first time that this has happened in 2020. BTC mainstream media mentions are up by more than 1,000% this year, as the past two months have seen big increases.

Bitcoin Price vs Sentiment Score

Sell-Side Liquidity Crisis

Bitcoin has been experiencing a sell-side liquidity crisis. Since the halving, BTC supply on centralized exchanges has decreased at a rapid rate. Liquidity is vanishing, as nearly 20% of BTC’s supply on exchanges has been withdrawn. Miners are refusing to sell their recently halved rewards. Institutional demand has come faster than expected in 2020, with firms like Grayscale, MicroStrategy, Square, Ruffer, and MassMutual purchasing significant quantities of BTC.. Grayscale has added over 210,000 BTC to their Bitcoin trust over the past 6 months while only 185,000 Bitcoins have been mined within the same time period. This increase in demand, with limited supply, could continue to drive prices higher.

Bitcoin Nears $30k

The price of Bitcoin traded within a 30.3% range this week, from the low of $21,815 all the way up to $28,422, BTC’s new all-time-high. Monday started off rather slow, pulling back -3% to set the weekly low. This turned around quickly as two big announcements caused prices to trend higher throughout the week. CEO Michael Saylor announced that MicroStrategy has purchased an additional 29,646 Bitcoins for $650M at an average price of $21,925. They now hold a total of 70,470 Bitcoins purchased for $1.125B at an average price of $15,964. The second announcement came from Anthony Scaramucci’s hedge fund SkyBridge Capital, who have filed documents with the U.S Securities and Exchange Commission on Monday to launch a Bitcoin fund.

Bitcoin Price Discovery

MicroStrategy Announced Purchase of Additional $650M Worth of Bitcoin

SkyBridge Launching Bitcoin Fund

Bitcoin Market Cap Passes $0.5T

With increasing prices comes increasing market cap. Bitcoin’s market capitalization has surpassed $0.5T for the first time ever in its history, another milestone set for the asset in 2020. BTC’s market cap dominance had surged above 70% mid-week before falling back down to 69.2%.

BTC Mcap

Litecoin Surges to New Yearly Highs

The price of Litecoin has set a new yearly high, increasing +209% from $43.9 to $129.6 YTD. The 30 day average number of Twitter users talking about LTC has surged from 719 to 1,960 this year.


The Downfall of XRP

On Monday evening, CEO Brad Garlinghouse said that the U.S Securities and Exchange Commision (SEC) intended to sue Ripples over its sale of XRP. The announcement caused traders and investors to panic, as XRP’s daily sentiment score reached record lows. The price of XRP was cut in half (-50.2%), falling from $0.504 to $0.251 within 48 hours of the announcement. Several exchanges, OTC desks, Asset managers, etc. have already delisted the asset. This includes Coinbase, Bitstamp, OKCoin, Beaxy, OSL, Jump, Galaxy, Bitwise, 21Shares, and more. One can only assume that this list will continue to grow, a worrisome sign for Ripple and XRP investors.

XRP Price vs Sentiment

Ripple to be sues by SEC

XRP Conversations Soar

On Wednesday December 23rd, there were over 38,000 tweets sent out about XRP, a new all-time-high (previous high of 33,546 was set in January 2018). For perspective, XRP accounted for nearly 30% of total cryptocurrency related tweets on Wednesday.

XRP Tweet Volume

Tweet Dominance

Weekly Performance of DeFi

The median DeFi token saw a -4% return this past week. INJ, SNX, and LUNA led the sector with positive double digit returns.


Notable News

India's Leading Bitcoin Exchange Raises $13.9M from Block One & Coinbase Ventures

Blender Launches Decentralized Privacy Bitcoin Wallet

Contact us for a demo of our SigDev platform to view all market-moving events in real-time.

This Week's Podcast Episodes

Ep. 32 - Betting $100M+ on North American Crypto Mining with Mike Colyer (DCG Foundry)
In our thirty-second episode Mike Colyer (CEO of DCG Foundry) discusses Digital Currency Group's $100M+ investment in North American cryptocurrency mining, providing financing to miners, miners (shrinking) influence over price, why producing new equipment is so difficult, and more. Listen here

Ep. 33 - Market Making for Digital Assets with Anton Golub (flovtec)
Anton Golub (CEO of flovtec) joins The TIE's podcast to chat STOs, colored coins, liquidity, making markets, and why the lightning network will never work. Anton is a crypto OG, and this episode is a can't miss. Listen here