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
While BTC has had short periods of crossing over the 14d and 30d SMAs, it has crossed over the 50d SMA (yellow) on the 5th January.
Fundamentals
Localbitcoins - Iran
This week, it was noted that Bitcoin was being sold a very high premium on Localbitcoins in Iran - some sellers selling 1 BTC for over 1BN Iranian Rials (worth over $24k USD). This is reflecting false market rates as the above figures is being calculated by the official market rate (42,000 IRR = 1 USD) but in reality the market rate is ~1/3 of this (13,000 IRR = 1 USD) effectively inflating the price by 3.32x.
Digging deeper at the volume data, we can see that the actual appetite overall in Iran for purchasing BTC is extremely low (especially last few days where one might expect spikes in volume). For example, volume trades over the platform rarely hits over 50 BTC in total. There is little evidence of individuals wanting to buy BTC on Localbitcoins for some years.
Paxful - Kenya
Kenya has seen sustained increased volume over the Paxful platform and is ~950% higher than at the start of 2019. What makes trends like this in Africa perhaps salient is that it comes a time when crypto infrastructure on the continent has become a focus for many crypto entrepreneurs. One notable example being Jack Dorsey (CEO of Twitter) who, in November 2019, travelled to Africa to speak to several tech-leaders. While in Ethiopia, he tweeted:
“Africa will define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid 2020,”
Confirmed Transactions Per Day
Confirmed transactions has been flat in the last week at ~292k transactions yesterday. Transactions per day is up 5% YTD.
Mean Transaction Value
The mean transaction value has decreased 6% for the week and 19% 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 down 5% hovering around $1.16Bn USD.
Hashrate
Bitcoin hashrate (7 day moving average) is up 13% for the week. Hashrate is up 158% YTD. Currently at 107m TH/s on the 7 day moving average.
Daily Active Addresses
The daily active addresses count for Bitcoin is up 1% from the last week. Active address count is still 38% 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 114% 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 ~853 BTC).
Wrapped BTC
Wrapped BTC (WBTC) is an ERC20 token backed 1:1 with Bitcoin.
The total value of Wrapped BTC continues to stay flat at 589 BTC.
BTC Days Since All Time High
Tweet of the Week
Our ‘Tweet of the Week’ comes from German finance author, Holger Zschaepitz. 2020 has seen its first few days rattled by political tension largely stemming from conflict in the Middle East. Notable climbers in the last weeks have been risk-off assets like brent oil and Gold. YTD, Bitcoin has also seen positive price action and is up over 5%. It remains to be seen as to how the markets will react to continued political unrest and uncertainty in the coming weeks.
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.
Interested in partnering with ID Theory or building something special? Get in touch through our website or at info@idtheory.io.