The TIE
November 02, 2020

The TIE Weekly Insights (Nov 2)

Some highlights from this week:

The TIE's Crypto SigDev™ now supports real-time signals and market updates on the following fourteen assets:

Bluzelle, CertiK, Joystream, Livepeer, The Graph, Flow, Axie Infinity, Ankr, Arcoin, BarnBridge, CELO, Ren, ProjectSerum, SushiSwap

Market Overview

The total crypto market cap sits at ~397B, remaining unchanged this week. This wasn’t the case for Bitcoin though, as it’s market cap added on $14B to increase its total by nearly 6%. BTC currently makes up 63% of the entire ecosystem. Returns were mostly negative throughout the market, as were tweet volumes. Long term sentiment hasn’t changed much as 8 out of 10 coins are still high. Trade volumes were up for Tether, Bitcoin, and Litecoin.

Market Overview

Bitcoin was the clear winner this week as it was the only coin out of the top 10 that saw positive returns (5.9%), while the median coin decreased by -6%.

Weekly Performance of Major Cryptocurrencies

DeFi continues to lead in the media, despite decreasing mentions this week. Tether media coverage increased by 32%, as news stories picked up on the Chinese authorities cracking down on gambling sites that use USDT. Binance started trending in the media this week as a leaked “Tai Chi” document reveals Binance’s elaborate scheme to evade crypto regulators.

Trending topics in the media

Another Bullish Week For Bitcoin

Bitcoin moved in an uptrend this week, hardly spending any time below the weekly opening price. This was the 4th week in a row that BTC closed up/green (7 out of the last 10 have closed up). BTC traded within a 10.6% range from the low of $12,776 to the high of $14,135.

Bitcoin Price this week

The market has been responding positively to the continuous inflow of news this week. Avanti Financial’s banking charter was approved by the Wyoming State Banking Board, becoming the second newly chartered bank in the state in 2020. Singapore’s largest retail and commercial bank, DBS, has soft launched a crypto/fiat trading exchange. This will immediately become the easiest on ramp for people who bank in Singapore.

Bitcoin Closes October At 2nd Highest Monthly Price In History

Bitcoin closed the month of October at $13,805; its second highest monthly closing price in its history. The only monthly close that was higher than this was $13,863 that was set back in December of 2017, the same month that BTC set it's all time high price of $20,000. BTC has now spent 98 days above the $10,000 key level. We highlighted this in last week's insights.

Bitcoin monthly chart

Below is a list of Bitcoin’s top 10 highest monthly closing prices.

Bitcoins top 10 monthly closing prices

Bitcoin monthly tweet volume has increased by over 15% in October. There were a total of 865k tweets about BTC, slightly above the average 835k per month. This is likely due to price reaching new yearly highs. Interestingly though, BTC has yet to see a month in 2020 with over 1M tweets.

Bitcoin Tweet Volume Month Over Month

October Brings Change

While Ethereum has outperformed Bitcoin so far this year with the help of the decentralized finance (DeFi) boom during the summer, things may be changing. The crypto community seems to have shifted their attention from Ethereum over to Bitcoin. BTC saw positive returns of 30% in October, over 3x ETH’s 10% returns. I believe that we will see BTC outperform ETH to close out the year.

Bitcoin vs Ethereum Performance in October

Sentiment Shift

Since the beginning of October, investor’s sentiment has been more bullish on BTC than ETH. This is indicated by the 30 day average daily sentiment score on the chart below. The amount of news and positive announcements that we have been getting lately has played a role in this. Since Oct 1, ETH sentiment dropped sharply while BTC sentiment continued to rise. There's now a 6 point gap in these scores, the biggest difference since May.

30 day average daily sentiment score: Bitcoin vs Ethereum

Trading Volume vs. Tweet Volume

If we compare trading volume and tweet volume for BTC and ETH, it paints a clear picture of where traders and investors are participating. Bitcoin trading volume increased by 13% while Ethereum decreased by -18% in October.

30 day average report trading volume for BTC and ETH

We see a similar pattern here as well. Bitcoin tweet volume increased by 15% while Ethereum decreased by -6%. This has pushed Bitcoin tweet dominance to over 53%.

30 day average tweet volume for bitcoin vs ethereum

Tweet Dominance: Bitcoin vs Ethereum

Total Tweets Per Year

Both Bitcoin and Ethereum are on track to beat 2019 in terms of total number of tweets about the cryptocurrencies, but are well below the amount that we saw in 2018.

Running total of Bitcoin and Ethereum tweets per year

Tezos Sparks Conversations

Tezos saw the biggest increase in tweet volume at 22.7% this week. This rise in conversations was caused by a number of different news events and announcements. On Oct 19, ByBit launched 4 new USDT perpetual trading pairs; XTZ, ETH, LTC, and LINK. This initiated the rise of tweet volume, but it was also the beginning of a -20% price decrease. We saw a big spike in tweets quickly after Binance Staking launched XTZ Super Rewards on Oct 20, which allows users to stake their XTZ to earn up to 20.5% APY. And finally, tweet volume reached a new one month high following the release of Kukai version 1.9 from TezosCommons on Oct 29. This will allow DirectAuth users to login with one click and be able to send XTZ to people by simply entering their Google, Reddit, or Twitter usernames.

Tezos Price vs Tweet Volume

DeFi Continues To Bleed

DeFi tokens continue to fall from their highs again. The median DeFi token decreased by -6.4% this week. GNO and REP were the only two to see positive returns.

Weekly Performance of DeFi Tokens

Since the launch of UNI token, there has been a very consistent negative correlation between the top DeFi tokens vs. BTC and surprisingly ETH too. This is much different than the correlation between BTC, ETH, and the other major cryptocurrencies.

Correlations of DeFi and BTC and ETH

Excluding BTC and ETH, the most popular cryptocurrencies on Twitter are XRP, LTC, LINK, and UNI according to their 7 day average tweet volume. UNI has gained traction quickly, as it gets more than double the amount of tweets as some of the biggest cryptos like BCH and ADA.

Top Cryptocurrencies by 7 Day Average Tweet Volume

Cryptocurrencies With The Biggest Changes in Long-term Sentiment This Year

Cryptocurrencies With The Biggest Changes in Long-term Sentiment This Year

Notable News

Wyoming State Regulators Approve Avanti, America's 2nd Bitcoin Bank

Singapore's Largest Commercial Bank Launches Bitcoin Exchange

JP Morgan's JPM Coin See its First Commercial Use

This Week's Podcast Episodes

Ep. 23 - Bringing Crypto Mainstream with Joel Edgerton (bitFlyer)
In our twenty-third episode, Joel Edgerton discusses how we make cryptocurrency attractive to billions of potential users across the world, listing new assets, and global cryptocurrency regulation. Listen here

Ep. 24 - Crypto Market Structure with Aya Kantorovich (FalconX)
In our twenty-second episode, John Peurifoy discusses how FPG helps institutions trade at scale with limited slippage, liquidity, and token valuation. Listen here