2020 in numbers: Bitcoin records, Defi boom and institutional acceptance

BTC/USD Bitstamp Exchange BitC/USD graph. Data: TradingView (as of 6.01.2021).

2020 turned out to be one of the brightest in the history of the industry. Despite the collapse in March by 50%, the price of bitcoin over the year increased by 304%, having updated the historical maximum several times. At the beginning of January 2021, the bitcoin exchange rate exceeded $ 35,000, and the capitalization of the cryptocurrency market has updated the historical maximum at marks above $ 900 billion.

Week/USD schedule Bitstamp Exchange. Data: TradingView (as of 6.01.2021).

No less impressive dynamics was demonstrated by the second Ethereum cryptocurrency capitalization. Its course in 2020 increased by 456%, although I did not beat the price record set in early 2018. In many ways, the price was promoted by the successful launch of the zero phase Ethereum 2.0, which implies migration from Pow-Mining to the Proof-OF-Stake algorithm.

In early January 2021, the Ethereum rate exceeded $ 1150, but the asset is traded below its historical maximum.

Bitcoin price dynamics, index S&P 500 and gold during 2020. Data: Messari.

Against the background of the first cryptocurrency, gold and the stock index S looked pretty pale&P 500, which during the year increased by 24% and 16%, respectively.

Market moods and correlations

Dynamics of the index of fear and greed. Data: Alternative.me.

Correlation of assets over the past year. Data: Blockchaincenter.

• 2020 was full of emotions, which was reflected in the dynamics of the cryptocurrency “index of fear and greed”. Indicators of the indicator indicated extreme fear during the March collapse. By the end of the year, the index values ​​were indicated at the extreme degree of greed and remained in this zone all of December.
• During the year, Bitcoin was quite closely correlated with the “barometer of the American economy” – a stock index S&P 500. The statistical relationship with gold was also significant. The most closely digital gold correlated with other cryptoactives at the Proof-OF-WORK algorithm, especially with Ethereum and Litecoin. This largely explains the almost synchronous movement of top coins https://gagarin.news/news/how-are-trading-volumes-useful-in-cryptocurrency-analysis/ during periods of increased volatility.

The volume of trading

Trading volume (STO), billion $. Data: Cryptocompare.

• In December 2020, the volume of trading in the spot market has renewed a historical maximum, reaching $ 350 billion on the leading sites (previous records of $ 307 billion were recorded in December 2017 and January 2018).
• In the context of exchanges, the absolute leader remains Binance, which accounted for $ 219 billion. The daily maximum of the spoon of trading on it reached $ 15 billion, and the average annual turnover amounted to $ 3.88 billion (+36% compared to 2019). The total trading volume on the Binance ecosystem platforms in 2020 exceeded $ 3 trillion.
• According to Cryptocompare, the top 3 trading platforms in December also included American Coinbase exchanges ($ 45 billion) and Kraken ($ 21 billion).

Futures and options

Dynamics of open interest in bitcoin textures. Data: bybt.Com.

Share of exchanges in the general OI for bitcoin fuses. Data: bybt (as of 06.01.2021).

Data: skew (as of 29.12.2020).

• Open interest in the market of bitcoin fictions after several corrections reached a record of $ 10 billion by the end of the year. This is a sign of significant demand for derivatives based on the first cryptocurrency.
• The growth of the share of the regulated Chicago commodity exchange (CME) in the futures market indicates increased demand for derivatives among institutional and other large players – in less than a year the platform took leading positions in the segment, overtaking Bitmex, Binance and OKEX.
• In 2020, the total volumes of open positions on bitcoin points increased to $ 7 billion. The largest market share in this segment is invariably on Deribit.

Market capitalization of Ethereum Bitcoin blockchain. Data: Defi Pulse (as of 1.01.2020).

TOP-3 Defi project at the cost of blocked funds, billion. Data: Defi Pulse (as of 1.01.2020).

• In 2020, the decentralized finance sector (Defi) survived a real boom. January 1, the total volume of funds blocked on smart contracts (TVL) was in the region of $ 600 million, and by the end of December it exceeded $ 15 billion, according to the DBANK service. In less than a year, the indicator has grown 20 times.
• The so -called “bitcoins on Ethereum” have gained significant popularity. Protocols like WBTC, RenbTC and HBTC offer digital gold to the DEFI sector abundant application. Demand for secured by bitcoin reserves of Ethereum Actives limits the active proposal of the first cryptocurrency and, therefore, contributes to its growth.
• The total cost of tokenized bitcoins at the end of 2020 exceeded $ 4 billion. The share of WBTC in its segment was more than 80%.
• As of 1.01.2020 The three leaders of the Defi Pulse rating included Maker, Aave and Compound. Their TVL amounted to $ 2.84 billion, $ 1.99 billion and $ 1.93 billion, respectively.

The main milestones of Defi development in 2020

oneJanuary 1 – the total TVL is in the region of $ 600 million, in early February the figure exceeded $ 1 billion. The most popular Defi project is MakerDao.

2On May 13, MakerDao stopped supporting the Sai monosalological stabblecoin, accelerating the transition to the multi -zalovo DAI.

3On May 18, the decentralized exchange of Uniswap launched the second version of the protocol.

fourJune 16 – The Compound Landing Project has released a compound token. The project received a powerful influx of funds and briefly headed the Defi Pulse rating. The event marked the beginning of Hype of “profitable farming” and the start of the widespread race for high profit for the funds blocked in the applications.

5July 2 Capitalization of the USDC stablecoin exceeded $ 1 billion.

6On August 30, the daily trading volume on Uniswap first exceeded the corresponding indicator of the largest American exchange of Coinbase.

7On August 26, the “vampire” Sushiswap project was launched, thanks to which Uniswap went to leaders among Defi projects for some time, but soon lost 70% of the liquidity.

eightSeptember 17 Uniswap has released UNI control token. During the largest Eirdrop in the history of Defi, 113 million UNI were distributed among 184 thousand DEX users, including liquidity suppliers and SOCKS tokens holders.

9November 29 – The total number of Defi users overcame the line of 1 million.

tenDecember 25-The host of the DEX aggregator 1inch released the token of the same name, distributing part of the coins among users.

The volume of trading on decentralized exchanges, $ billion. Data: Dune Analytics.

The market share of the largest dex. Data: Debank (as of 1.01.2021).

Also last year, the segment of decentralized exchanges (DEX), which is an important component of the Defi Ecosystem, was rapidly developing. According to Dune Analytics, the total turnover on DEX in 2020 exceeded $ 120 billion, and in total more than a million unique users took part in non -keastodial trade.

In this segment, Uniswap leads, the share of which is gradually reduced. Curve and “Vampire” Sushiswap project is also popular. Among the liquidity aggregators, 1inch leads, the Matcha platform from developers 0x is gaining momentum.

Stebblecoins

The dynamics of the total capitalization of stablecoins in 2020. Data: Messari.

TOP-5 leading stablecoons on market capitalization. Data: Messari (as of 1.01.2020).

During 2020, the total capitalization of stablecoins increased by more than five times – from about $ 5 billion in early January to almost $ 30 billion at the end of December. The share of Tether (USDT) in the segment is about 75% under the capitalization of $ 21.1 billion (as of 1.01.2020). USD Coin (USDC) and algorithmic stablecoin DAI are gaining popularity. The capital’s capitalization increased in 2020 by more than 20 times and reached $ 1.2 billion.

P2P trade

Trading volumes on the Localbitcoins P2P platform in 2020, million $. Data: Coin.Dance.

Trading volumes on the PXFUL P2P platform in 2020, million $. Data: Coin.Dance.

• Since the beginning of 2020, the Localbitcoins and Paxful P2P platforms have been recorded an increase in trading volumes that reached peak values ​​in the summer. Then Bitcoin stormed the key at that time $ 10,000.
• Despite the further rapid growth of the course of the first cryptocurrency, the volumes on Localbitcoins stagnated. By the end of 2020, the Paxful indicators began to fall even by decreasing by an average of 20%.

Mining, hashrate, commissions

Bitcoin hashrate dynamics in 2020. Data: Blockchain.Com.

Bitcoin production complex. Data: Blockchain.Com.

• During the year, the Bitcoin hashrate grew by almost a quarter, the difficulty of mining increased by 35%. In May, a halving award for a block took place, which briefly reduced the income of miners. Soon, the take -off of the price of the first cryptocurrency leveled the loss of miners from reducing the rate of the emission of Bitcoin. The highest rates of miner income were observed in November and December ( +50% and +31%, respectively).
• Another consequence of the halving was an increase in the share of transaction commissions in the structure of the income of bitcoin mainers.

Bitcoin Mainers income by month, million $. Data: Coin Metrics.

The dynamics of the share of commissions in the income of bitcoin and Ethereum mainers. Data: Coin Metrics.

• The Ethereum hashReit raised exactly in 2020. This could be facilitated by the rising price of the second capitalization of cryptocurrency, which affects the profitability of mining and contributing to an increase in mining capacities.
• Hype around Defi contributed to a high load on the network of the second in capitalization of cryptocurrency and an increase in gas price. This led to an increase in miners’ income, in the structure of which transaction commissions made up a significant share. The total income of Ethereum Mainers reached $ 368 million in December, growth compared to the November indicator amounted to 61%.

Dynamics of the Ethereum hashreite in 2020. Data: Etherscan.

Ethereum revenues for months, million $. Data: Coin Metrics.

The average transaction commission on the Ethereum network increased from several cents to several dollars, and in early September, the indicator reached $ 15. A similar trend, although not so pronounced, was observed in bitcoin.

The dynamics of the average commission for BTC and ETH transaction. Data: Blockchair.

The largest pools for bitcoin mining. BTC data.COM (as of 1.01.2021).

In 2020, the alignment of forces in the mining market also changed significantly – the Binance Pool launched in April entered the second place in a share in the hashrate of Bitcoin. The palm of the championship belongs to F2Pool, which controls about a fifth of the hash.

Onchain-data

The dynamics of the volume of value transferred to the blockchain. Data: Coin Metrics.

Percentage of the market supply of bitcoin, which has not moved for more than two years. Data: Glassnode, Yahoo Finance.

2020 was marked not only by the growth of crypto actual prices, but also by high onchain. The volume of the transferred cost in the Bitcoin blockchain increased by 45% compared to the 2019 indicator – from $ 671.8 billion to $ 976.2 billion. At the same time, the share of the proposal of bitcoin, which has not moved for more than two years, has increased – this indicates a decrease in [simple_tooltip conte = ’the tendency of economic entities to prefer consumption at present, and not in the remote future.’] Temporary preferences [/simple_tooltip] among market participants.

The price of bitcoin and the dynamics of balance of centralized exchanges, thousands of BTC. Data: Glassnode, Yahoo Finance.

Bitcoin price and the number of addresses with ≥ 1000 BTC. Data: Glassnode, Yahoo Finance.

Against the background of growth in digital gold, the balance of centralized exchanges gradually decreased. This may be the popularity of Defi projects, including Wrapped Bitcoin, and the desire of market participants to independently control the means.

In 2020, the number of addresses among various categories of investors increased:

• C ≥ 0.01 BTC – +8.43%;
• ≥ 0.1 – +10.67%;
• ≥ 1 – +5.86%;
• ≥ 10 – +0.53%;
• ≥ 100 –0.04%;
• ≥ 1000 BTC – +7.37%;
• ≥ 10,000 –11%.

The dynamics of the number of Ethereum transactions. Data: Etherscan.

Exchange balances and share of the offer of Ethereum, involved in smart contracts. Data: Glassnode.

• Since the beginning of the year, the number of transactions on the Ethereum network has doubled. The indicator surpassed the marks of early January 2018, when the hype around the ICO was in full swing.
• As in the case of bitcoin, Ethereum balances on centralized exchanges have significantly decreased. At the same time, the share of coins involved in smart contracts increased.

ETH Number Dynamics in Ethereum 2 Steiking.0. Data: Glassnode.

A significant event was the launch of Ethereum 2.0. By the end of the year, there were more than 2 million ETH at the deposit contract of the new system. A decrease in active supply by almost 2% can contribute to the long -term growth of the second in capitalization of cryptocurrency.

The activity of institutional

The volume of investments of public companies in Bitcoin as of January 4, 2021. Bitcoin Treasuries data.

According to Bitcoin Treasuries, public companies have acquired more than a million BTC (5.48% of the cryptocurrency market supply) worth more than $ 35 billion.

• The Bitcoin investment trend as hedging the risks of the depreciation of the dollar of the beginning of Microstrategy, which in August first acquired 21,454 BTC worth more than $ 250 million. A month later, the company investing on NASDAQ invested an additional $ 175 million, and in December $ 650 million. The total Microstrategy invested $ 1.12 billion in Bitcoin, becoming the owner of 70 470 BTC – at the time of writing they are estimated at more than $ 2 billion.
• In October, the Bitcoin investment was reported by Square Paying Dorsie – it purchased 4709 BTC in the amount of $ 50 million.
• In mid -December, the public company Ruffer Investments announced the purchase of 45,000 BTC in the amount of $ 744 million.
• At the end of the year, the Skybridge Capital investment company Anthony Scaramucci launched a Bitcoin basis with assets of $ 310 million.

Grayscale Bitcoin Trust (thousands of BTC). Data: Grayscale.Co.

The dynamics of the positions of large investment players (Commercial) on Cme. Data: CFTC.

• One of the most active institutions was the investment company Grayscale Investments, under the control of which, as of the beginning of 2021, is 607 thousand BTCs. The total cost of crypto acts at the disposal of Barry Silbert is estimated at $ 22.8 billion (according to 4.01.2021).
• The demand for bitcoin by whales is also evidenced by the dynamics of positions on bitcoin textures of major Commercial category players on the CME exchange. The share of these market participants in the OI since October is growing confidently. Whales open mainly long positions.

CBDC in 2020

2020 was remembered by the statements of representatives of the Central Banks about the beginning of research in the field of digital currencies (CBDC). Coronavirus pandemia only accelerated this process:

• The most attention is focused on the digital currency of China, the second economy of the world. Since the summer of 2020, pilot tests with digital Yuan in Shenzhen, Suzhou, and later in Shanghai began in the country;
• The study of the prospects of digital euros was also announced in the European Union – the European Central Bank plan will presumably present a plan for its launch in mid -2021;
• The release of CBDC was not excluded in Russia – in October, the Central Bank of the Russian Federation submitted a report on a digital ruble in which he described his vision of the implementation of the project. The final decision on the development of the “digital ruble” has not yet been made.
• On October 20, 2020, the Bahamas of the first in the world launched their own CBDC called Sand Dollar, which was introduced at the state level.

Regulation in 2020

2020 in the Asian regions marked the legalization of cryptocurrencies and positive changes in the field of regulation of the legislative framework. In China, the blockchain received official status, and the local regulator legalized operations with bitcoin. Positive changes occurred in South Korea, Singapore and India.

Despite the investment attractiveness of the continent, the authorities of individual regions only began the first steps in creating a regulatory environment for cryptocurrencies. In some cases, such as Zimbabwe, digital assets are prohibited. South Africa regulator proposed equalizing cryptocurrencies to financial products. Nigeria authorities equated digital assets with securities, “if not proven otherwise”.

AT Kazakhstan Digital assets were recognized as property. In 2020, the country was actively developed by the cryptocurrency mining sector. As a result, the share of the region in the hashrate of bitcoin increased by more than four times.

AT Ukraine The authorities approved the strategy for the development of the financial sector until 2025, highlighting one of the directions for the development of blockchain technologies. On December 2, in the first reading, the deputies of the Verkhovna Rada adopted the Law “On Virtual Assets”, but mining in the country has not yet been regulated.

The United States actively worked on initiatives that impede the use of digital assets in illegal activities. At a high level, the field of application of blockchain and the concept of digital dollar were discussed.

In 2020, the authorities Kyrgyzstan put miners tax in 15% and defined virtual assets as a digital expression of value. The legal status of cryptocurrencies in the country is still not defined.

Against the backdrop of the Pandemia of Coronavirus, the European Commission activated work on the regulation of cryptocurrencies and stablecoins. The European Union was called upon to accelerate the introduction of legal norms for digital assets. In the region, for the year, there is a fifth directive of countering money laundering (5AMLD EU).

AT Russia From January 1, 2021, the Law “On Digital Financial Assets” entered into force, which defines cryptocurrencies and prohibits their use in the country’s territory as a means of paying for goods and services, as well as advertising of this possibility. During the year, the Ministry of Finance of the Russian Federation has repeatedly made proposals for the regulation of the industry. For example, he proposed to ban miners to receive cryptocurrency and oblige digital currencies to declare their savings under the threat of large fines and imprisonment.

Regulation in 2020

AT Russia From January 1, 2021, the Law “On Digital Financial Assets” entered into force, which defines cryptocurrencies and prohibits their use in the country’s territory as a means of paying for goods and services, as well as advertising of this possibility. During the year, the Ministry of Finance of the Russian Federation has repeatedly made proposals for the regulation of the industry. For example, he proposed to ban miners to receive cryptocurrency and oblige digital currencies to declare their savings under the threat of large fines and imprisonment.

AT Ukraine The authorities approved the strategy for the development of the financial sector until 2025, highlighting one of the directions for the development of blockchain technologies. On December 2, in the first reading, the deputies of the Verkhovna Rada adopted the Law “On Virtual Assets”, but mining in the country has not yet been regulated.

AT Kazakhstan Digital assets were recognized as property. In 2020, the country was actively developed by the cryptocurrency mining sector. As a result, the share of the region in the hashrate of bitcoin increased by more than four times.

In 2020, the authorities Kyrgyzstan put miners tax in 15% and defined virtual assets as a digital expression of value. The legal status of cryptocurrencies in the country is still not defined.

The United States actively worked on initiatives that impede the use of digital assets in illegal activities. At a high level, the field of application of blockchain and the concept of digital dollar were discussed.

Against the backdrop of the Pandemia of Coronavirus, the European Commission activated work on the regulation of cryptocurrencies and stablecoins. The European Union was called upon to accelerate the introduction of legal norms for digital assets. In the region, for the year, there is a fifth directive of countering money laundering (5AMLD EU).

2020 in the Asian regions marked the legalization of cryptocurrencies and positive changes in the field of regulation of the legislative framework. In China, the blockchain received official status, and the local regulator legalized operations with bitcoin. Positive changes occurred in South Korea, Singapore and India.

Despite the investment attractiveness of the continent, the authorities of individual regions only began the first steps in creating a regulatory environment for cryptocurrencies. In some cases, such as Zimbabwe, digital assets are prohibited. South Africa regulator proposed equalizing cryptocurrencies to financial products. Nigeria authorities equated digital assets with securities, “if not proven otherwise”.

The hottest topics 2020

On the night of Friday, March 13, the price of bitcoin in the moment collapsed to $ 3800, having lost more than 50% of the cost per day. The second in capitalization of cryptocurrency Ethereum failed $ 100. The fall comparable in depth was observed in traditional markets.

On May 11, a third halving in the history of Bitcoin on Block #630000 took place. As a result, the miners award for the mined block decreased from 12.5 BTC to 6.25 BTC. The next halving will take place in 2024, and the latter – around 2140.

One of the main events of 2020 can be considered a trial between the US Securities and Exchange Commission and the Telegram Open Network block Pavel Durov.

On October 1, 2020, the US URSE -FIRE TRAING (CFTC) filed a lawsuit against the once largest cryptoderivative exchange of Bitmex and its founders. Subsequently, the exchange encountered a number of other claims, and the CEO of the platform Arthur Hayes left the position.

In line, the Almighty Commission was Ripple, standing behind the development of XRP token token. As expected, the regulator accused Ripple of the sale of unregistered securities to retail investors.

In October, the PayPal payment company announced the upcoming integration of the functions of buying and selling bitcoin, Bitcoin Cash, Ethereum and Litecoin for US residents. The news positively affected the market and laid the foundation for the ascent of Bitcoin to the new annual, and then historical maximum.

Quotes of the year

“It’s just better. In the long run, people switch to things that are better “.Tim DraperAbout his investment in Bitcoin

“This is the first time I feel the time to buy bitcoin. This fall was triggered by panic and he did not have enough grounds “.Edward SnowdenInformatics specialist

“For 953 million people in 20 countries with a weakening national currency, Bitcoin represents something more than a treasury asset. For them, Bitcoin is an ark from the flood “.Michael SaylorCEO Microstrategy

“There are no blockchain opponents in the power. This is the technology of the future, everyone understands this. Moreover, in power corridors, it will be stimulated in every possible way, cultivate and develop ”.Anatoly AksakovHead of the State Duma Committee for the Russian Federation on the Financial Market

“Bitcoin will become more mature and we will see more regulation in relation to its payment functions. Existing payment mechanisms are ineffective – this is a driver for bitcoin growth “.Jay ClaytonChairman of the SEC USA

“We believe that it is more important to do this correctly than to be the first. This means that we not only look at the potential advantages of CBDC, but also at potential risks. “.Jerome PowellHead of the US Federal Reserve