ID Theory Insights
ID Theory is a London-based cryptoasset investment firm. Our weekly Insights report provides the latest key macro as well as on-chain data for Bitcoin. If you would like to receive insights directly to your inbox, you can subscribe here:
BTC and Gold
BTC and US 2 Year Treasury Yield
BTC and USD/CNY
BTC and EUR/CHF
BTC and VIX
BTC and SMAs
BTC has climbed above and maintained position above the 90d simple moving average. BTC is now priced above the 7, 30, 50 and 90 day SMAs.
CME BTC Futures
The breakdown of CME Futures positions below indicate that the sell side of the market (dealer/intermediary) are reducing their long positioning whilst the buy side (asset managers/institutional) are increasing long positioning. The last time this overall shift occurred it represented a change in market sentiment that proceeded the bullish impulses of Q2 2019.
Fundamentals
Localbitcoins - Venezuela
Venezuela has seen a 38% increase in BTC volume from the previous week (in VES terms). This is the highest volume seen on the platform ever seen.
By looking at the BTC denominated volume we can see there has been a 10% increase from the previous week at 638 BTC. While this volume might seem somewhat small in comparison to spot market volume, we should recognise that the average monthly wage in Venezuela is $3.61 arguably making this volume significant than in other countries. Nicolas Madura has ordered the eleventh minimum wage hike in 24 months, but wage increase percentages is denominated in the hyper-inflated currency of VES making the USD equivalent still extremely low.
BTC is currently listed on Localbitcoins Venezuela Bolivars is ~$10.3k ($2.2k) above spot price at time of writing according to Bloomberg Venezuela Café Con Leche Index. Volumes in countries with low economic freeedom have tend to demonstrate the highest adoption rates in the last few months.
Last year, Argentina saw premiums as high as $2250 after Argentinian citizens were facing restrictions of foreign currency purchases. While it is clear that political events can stimulate Bitcoin buying in economically restricted countries, there is evidence to suggest such demand comes at a premium.
Confirmed Transactions Per Day
Confirmed transactions has increase in the last week at ~315k transactions yesterday (up 8% for the week). Transactions per day is up 5% YTD.
Mean Transaction Value
The mean transaction value has increased 23% for the week and 46% YTD.
Bitcoin Economic Throughput
Bitcoin economic throughput is a measure of financial bandwidth per unit of time on the Bitcoin network. It is simply calculated by taking the average transaction size and multiplying it by the number of transactions.
Current economic throughput is up 32% hovering around $1.54Bn USD (66% YTD)
Hashrate
Bitcoin hashrate (7 day moving average) is flat for the week. Hashrate is up 157% YTD. Currently at 106m TH/s on the 7 day moving average.
Daily Active Addresses
The daily active addresses count for Bitcoin is down 3% from the last week. Active address count is still 34% YTD.
Bitcoin Days Destroyed
Bitcoin Days Destroyed (BDD) is an alternative metric for transaction volume on the Bitcoin network. It is calculated by taking the number of Bitcoins in a transaction and multiplying it by the number of days it has been since those coins were last spent.
During the last week there has not been any significant BDD activity observed.
Lightning Nodes
The number of unique lightning nodes with channels on the Bitcoin network has been flat for the week. The number of nodes is up 115% YTD.
Lightning Channels
There are 28k unique channels on the lightning network is largely flat from the previous week. The BTC capacity on the Lightning Network has also remained flat (total capacity is ~856 BTC).
Wrapped BTC
Wrapped BTC (WBTC) is an ERC20 token backed 1:1 with Bitcoin.
The total value of Wrapped BTC is up 1% at 596 BTC.
BTC Days Since All Time High
Tweet of the Week
Our ‘Tweet of the Week’ comes from Peter Brandt who has highlighted the apparent lower boundary support found on a multi year channel as well as a possible break above a multi-month channel. He has chosen to ignore the high wick during the China news in October 2019 due to high frequency trading creating ‘over shoots’ making boundary line with many contact points hard to construct if they are used.
About the Author
Lewis Harland is an analyst at ID Theory and is a full time researcher of decentralised networks and cryptoassets.
ID Theory Ltd. is an Investment Advisor for cryptoasset investment fund, IDT Crypto Asset Fund Ltd.
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