ID Theory Insights

6th April 2020

Apr 06, 2020

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.

Correlations

BTC and Gold

Gold has served as a safe haven asset for 1000’s of years.

BTC and Inverted US 2 Year Treasury Yield

In a risk-off environment Treasury yields drop (and hence inverted yields rise).

BTC and USD/CNY

Weakening CNY may lead to a greater demand for capital flight from China.

BTC and CHF/EUR

The Swiss Franc (CHF) is a safe haven currency.

BTC and VIX

Volatility (represented by the VIX) generally increases in times of economic uncertainty.

BTC and S&P 500

The S&P 500 generally rises as risk appetite increases.

BTC Weekly SMAs and MACD

BTC has kept above the 200w MA with the MACD indicating increase bullish momentum.

Bitcoin Price Action

2020 is now currently the third worst performing year since 2013.

Bitcoin Derivative Market

The Commitment of Traders (COT) is a weekly report issued by the CFTC enumerating the holdings of participants in the Futures market. Dealer/Intermediary represents the sell side, Asset Manager/Institutional represents the buy-side.

Dealers/intermediaries have reduced their long positions. Institutions continue to take a predominantly short stance.

Open interest shows the USD value of open contracts offered by various platforms.

Open interest has been flat overall from the previous week.

Fundamentals

Google Trends - ‘Bitcoin’

Past 3 months - Worldwide

Searches for ‘bitcoin’ continues to decrease last week since the peak on 13th March.

Google Trends - ‘Bitcoin halving’

Past 3 months - Worldwide

Searches for ‘bitcoin halving’ has climbed to some of the highest levels seen in the last 3 months.

WeChat Index - ‘Bitcoin’

Searches for ‘bitcoin’ on WeChat continues to decrease from the peak seen on 13th March.

Localbitcoins and Paxful Volume - Global

USD volume on Localbitcoins is up 23% from the previous week.

USD volume on Paxful is up 12% from the previous week.

Localbitcoins has gained market share against Paxful as volume Localbitcoins now represents ~60% of the combined USD volume.

Confirmed Transactions Per Day

Confirmed transactions are up 8% since last week and down 7% YTD.

Mean Transaction Value

The mean transaction value has decreased 1% for the week and is up 14% YTD.

Bitcoin Economic Throughput

Current economic throughput is up 6% since last week hovering around $1.61Bn USD and is up 11% YTD on the 7d MA (moving average).

Hashrate

Bitcoin hashrate (7 day moving average) is up 5% for the week. Hashrate is up 7% YTD. It is currently at 104m 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 up 14% YTD.

Bitcoin Days Destroyed

During the last week there has not been any significant BDD activity observed.

Realised Cap

Realised Cap (Coinmetrics, 2018) is currently standing at ~$101.1 Bn.

MVRV

MVRV (Mahmudov & Puell, 2018) historically provides two important thresholds - MVRV above 3.7 could signal potential overvaluation and MVRV below 1 could signal undervaluation. The ratio ratio is currently at ~1.23.

Lightning Nodes

The number of unique lightning nodes on the Bitcoin network is flat for the week. The number of nodes is up 9% YTD.

Lightning Channels

The number of unique channels on the lightning network is flat for the week. The BTC capacity on the Lightning Network is up 1% for the week (total capacity is ~926. BTC).

Wrapped BTC

The total value of Wrapped BTC is up 3% in the past week. There are now 985 WBTC, which represents an increased interest in using BTC within the Ethereum ecosystem (and by extension DeFi).