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The Week On-chain (Week 36, 2021)

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The Bitcoin market has continued to power higher, breaking out of last weeks consolidation to new multi-month highs. Prices traded up from the weekly low of $46,562 to reach a high of $51,838.

As renewed optimism follows positive price action, on-chain transaction volumes are showing continued growth in dominance by large, institutional sized capital. We are also seeing declines in volume spent by long-term investors, A preference to HODL, and the accumulation of young coins. Miners have also started spending coins this week as hash-rate recovers over 42% since the July lows.

Miners Take Profits Off the Table

The Bitcoin mining market continues to recover after half of the hash-power came offline during the Great Migration out of China. The 14-day median hash-rate has recovered to 128 EH/s, which is approximately 29% below the all-time-high, and reflects a 42% recovery from the July lows.

The increase in hash-rate is likely a combination of previously obsolete hardware finding a second lease on life, and miners in China successfully relocating, re-establishing or re-homing their hardware and operations.

Competition in the mining market has continuously increased over time, leading the protocol difficulty to consistently rise. This growth has occurred despite the programmatic decline in new BTC issuance with each halving event. As a result, macro BTC rewards per hash have been in a long-term decline.

Whilst miner incomes are denominated in BTC, their  CAPEX and OPEX costs are largely denominated in fiat currencies. This makes miner effective revenue subject to price volatility.

With such a large portion of the mining hardware offline, and a global production constraints on ASIC chip manufacture, the current mining market is finding itself slow to respond to elevated coin prices since 2020. There are simply fewer machines fighting over the same number of coins, trading at higher coin prices.

As a result, miner USD revenue per hash has now risen back to July 2019 levels of $380k per Exahash, making operational miners exceptionally profitable on a historical basis.

As BTC prices hover around the $50k range over the last few weeks, some of these miners have started spending a portion of their coin balances to lock in profits. This week, around 2,900 BTC have been spent from miner balances, equal to around $145M at a $50k BTC price.

This may be a combination of affected miners in China obtaining fiat liquidity to cover costs, or operational miners taking profits and de-risking after the May sell-off. It is also likely that some of this revenue is earmarked for redeployment into facility expansion, and acquiring hardware from second-hand or new ASIC markets.

Note: the chart below uses our Workbench tool to subtract out the Patoshi coins to reflect the coin balance held by the remainder of the mining market.

Miner Balance (excl. Patoshi Coins) Live Chart

In response, the miner net position change has returned to a neutral level, indicating an on-net equilibrium between miner accumulation, and miner spending over the last 30-days. It is typical for the miner net position change metric to oscillate between around +5k and -5k BTC per month, making the current dynamics reasonably expected behaviour, and the market has clearly absorbed the additional sell-side pressure.

Miner Net Position Change Live Chart

Week On-chain Dashboard

The Week On-chain Newsletter now has a live dashboard for all featured charts here. We have also started production for Week On-chain video analysis to provide a deeper dive into the thesis and logic behind each weeks analysis. Visit and subscribe to our YouTube channel, and visit our Video Portal to see our video content.


Transaction Size, On The Rise

A key theme and characteristic of the 2020 to 2021 market cycle has been the increase in institutional sized capital. This trend is increasingly visible on-chain, and even after the 50% correction in May, appears to be a relatively sticky.

The average USD transaction size in the 2019-20 bear market was typically between $6k to $8k. This period was largely dominated by retail and early investment fund participants.

The 2020-21 bull market saw average transaction sizes increase significantly into a peak of $58.6k during the May sell-off. This has largely cooled off from July onwards, with the current average transaction size between $30k and $36k.

Relative to the 2019-20 period, this represents a significant 370% increase, despite the recent correction, reflecting continued and sticky institutional sized interest.

EA-Mean Transaction Size Live Chart

Further support for this observation is found the rising proportion of transaction volume dominance by $100k+ sizes. In the chart below, we can see the gradual squeezing of smaller size capital (<$100k) in yellow-red from 40% dominance in 2017, to represent only 10% to 20% of on-chain volumes today.

Conversely, institutional and high-net-worth size capital of $100k+ in green has expanded significantly over the last 12 months. The cohort moving between $1M and $10M (light green) has consistently represented between 20% to 30% of transaction volume since 2017.

The $10M+ cohort (dark green) however have grown considerably, from only 10% in October 2020, to over 30% dominance today. This reflects a notable growth in large size capital allocation and trading activity. Note that this data is entity adjusted, and thus filters for only economically meaningful activity (excludes self-spends and exchange wallet management for example).

Relative Volume By Size Live Chart

Young Coin Volume Dominates

Another observation regarding transaction volumes relates to classification based on coin ages. We have recently released a new metric called the Spent Volume Age Bands (SVAB), which classifies the proportion of daily coin volume by coin age. It is a counterpart to the Spent Output Age Bands (SOAB) metric, which ignores coin volume, and only looks at age brackets in proportion to the daily transaction count.

Some general principles for interpretation of these metrics are:

  • When more old coins (> 6m) are spent, there is a higher probability that previously illiquid coins are coming back into liquid circulation. This is most common during capitulation events, and in bull markets as coins are sold into strength.
  • When more young coins (1d to 6m) are spent, there is a higher probability that smart money investors and long-term holders are holding, and accumulation is taking place, as ‘hot coins’ are taken off the market.
  • Hot coins are those with lifespans less than 1-week. These dominate day-to-day network traffic and are more likely to be re-spent in response to volatility.

From a macro view we can see that hot/young coin volumes spike and dominate on-chain volumes in three typical occasions:

  1. Blow off tops where trading, speculation and ‘hot money’ movements reach a maximum.
  2. Capitulation events where new buyers are shaken out en mass and coins change hands many times during high volatility. Smart money also tend to step in and accumulate.
  3. Disbelief rallies at the start of bullish trends as traders sell into the first market strength seen in a long time.
SVAB Live Chart

The dominance of hot coin (< 1wk) volume is currently at a relative high of 94% of spent coin volume. Simultaneously, middle and old coin (> 1mth) volume is at an extreme low of less than 2% dominance which is even lower than the bear market base-load seen in 2019-20.

What this suggests is that the vast majority of coins spent at the moment, even as prices breach $50k, are highly liquid coins, and old coins are remarkably dormant. This indicates that conviction to HODL is extremely high and a lack of liquid supply could squeeze spot market prices higher.

SVAB Live Chart

To further confirm this analysis, we can see the volume of revived supply older than 1yr has fallen below 5k BTC per day. This indicates that investors who own coins older than 1yr are spending less, and HODLing more, even as prices rally. Previous events with low revived 1yr+ supply correlate with late stage bear markets and early bull markets.

Revived 1yr+ Supply Live Chart

Leverage Reaches New Heights

The final observation this week relates to the derivatives markets. Alongside positive sentiment and conviction to HODL in spot and on-chain markets, we are seeing open interest approach, or reach, new all-time-highs for Bitcoin and Ethereum.

Bitcoin perpetual futures markets currently have over $11.8B in open contracts which is trending strongly towards the April peak of $15B.

BTC Perpetual Futures Open Interest Live Chart

The market appears to be net long in perpetual futures markets with funding rates for BTC hitting approaching 0.03%. Whilst this level of positive lean is not overly high relative to levels seen in Q1 and Q2, it is similar to the funding rate seen just prior to the May sell-off. This could create a shorter term headwind if longs are squeezed out of their positions.

BTC Funding Rates Live Chart

This effect is even more pronounced for Ethereum where perpetual futures open interest has surpassed the previous ATH, hitting $7.8B this week.

ETH Perpetual Futures Open Interest Live Chart

Funding rates for ETH futures have similarly accelerated higher, reaching 0.02%, a level coincident with that seen prior to the May sell-off.

Whilst the supply dynamics in spot markets continue to show strength, caution and awareness is appropriate when of high degrees of leverage has entered derivatives markets. The combination of positive funding rates and high open interest can be an important indicator set for assessing a shorter term risk of cascading long liquidations.

ETH Funding Rates Live Chart

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Source: https://insights.glassnode.com/the-week-on-chain-week-36-2021/

Blockchain

The Most Profitable Cryptocurrencies on the Market

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Cryptocurrencies have recorded massive expansion in 2021. There’s no denying the fact that his year will definitely go into history books as one of the most ‘fruitful’ for these digital assets. The number of crypto traders has increased massively and currently, there are millions of people who are trading or are in possession of cryptocurrencies.

If you are thinking of joining the trading movement, you need to understand the fact that the crypto market is extremely volatile and everyday events can have massive impacts on their price. With that being said, we wanted to devote a bit of time to new traders who are looking to invest and make money off cryptocurrencies by naming the most profitable cryptocurrencies on the market today.

Binance Coin

Binance Coin is a digital asset that is often overlooked; however, it has massive value. Its current value is around $500, which is a solid price, but here’s where it gets better. As you may have concluded by now, this cryptocurrency is native to one of the world’s most reputable exchange platforms – Binance.

Now, you may think, there are a handful of other cryptocurrencies that have a higher value than Binance Coin, but here’s why you should consider trading with Binance Coin, especially if you have registered an account at Binance. The transactions with this cryptocurrency are far safer and faster on the platform, but what’s most important – the fees are much lower.

Ethereum

Next up, we have a cryptocurrency that many refer to as Ethereum. Before we unveil its price, let us give you a quick lesson. Ethereum is the name of the decentralized network in which the cryptocurrency named Ether can be traded. So, what you are looking for is Ether.

By market capitalization, Ethereum is the second-largest cryptocurrency in the world, falling behind Bitcoin. The reason why you should consider trading with Ether is that the open-source blockchain (Ethereum) focuses on this cryptocurrency and it can provide you with access to many other cryptocurrencies and NFTs, which proved to be a massive success in 2021.

Currently, Ether is at its highest value in history as it has a price of around $3,800.

Bitcoin

Finally, we have the cryptocurrency that started the whole movement – Bitcoin. Bitcoin was established in late 2008 and gained massive recognition in 2014. After reaching an all-time high at the time in 2017, it dropped in a matter of few months and no one believed that it can reach a second peak.

Not only did it manage to do that, but 2021 resulted in 2 spikes of its value. In April, Bitcoin peaked at over $60,000 and then, it dipped. However, after numerous experts indicated that Bitcoin will catch a second wind in 2021, many investors decided to put their money on the line and they didn’t do wrong.

Currently, Bitcoin’s value is over $62,000 and what’s better, is the fact that experts are convinced that it has the potential to rise to $100,000 by the end of the year. At the moment it’s one of the most wide spread cryptocurrencies in the world. Many industries have to deal with Bitcoin. Banking, retail, gambling. Online casinos receive bets made with cryptocurrency and allow withdraw winnings to Bitcoin wallet. You would be surprised how many gambling platforms accept crypto. To learn more about it visit our partners site Exycasinos.

Source: Plato Data Intelligence

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Blockchain

What Is the Best Crypto IRA for Me? Use These 6 Pieces of Criteria to Find Out More

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Are you considering investing in cryptocurrency? The cryptocurrency industry holds massive future potential, which is why it has attracted millions of investors in recent years. In fact, most cryptocurrencies in the top 10 have gained investors 1000% or more returns in the last few years.

That said, investing in crypto can often be expensive and cumbersome, which is why you need a crypto IRA.

Basically, a crypto IRA is a special kind of individual retirement account that allows you to invest in cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Stellar Lumens. A crypto IRA saves you big time on taxes and diversifies your portfolio.

Now, there are different crypto IRAs in the market. So, choosing the best one can be confusing. If you want to find the best crypto IRA here are six factors to look for:

1. The Charges Involved

When comparing different crypto IRAs, you want to first look at the fees.

Fees are not quite standard, and different custodians charge varying prices. You want to be sure you understand the various costs you’ll pay for holding an account with a particular provider.

Most companies usually charge a fixed amount for account setup, an annual maintenance fee, and a small commission on any trades you make.

Remember, not all providers state their prices upfront, and you may need to contact them for fee disclosures.

2. How Accessible the Crypto IRA Is

You also want to go with a crypto IRA that’s available in your country or state. Some providers may not operate in some areas, and it’s good that you have this information up front to help you narrow down on who to go with.

While at it, you can also test out the customer service to make sure that it’s not only available but reliable too, in case you need help along the way.

3. Ease of Use

The crypto IRA platform should be at least easy to understand and navigate. Essential features such as account funding and buying or selling options should be easy to locate even for beginners. A complicated account can make investing a real headache.

4. Variety of Cryptocurrencies

The number of cryptos you can invest in will vary from one crypto IRA to another. So, depending on what you’re working with, go for an account that allows different cryptocurrencies. The idea is not to go for something that limits you so much as you may want to diversify your portfolio with various cryptos later.

5. Funding Options

You’ll, of course, need to load fiat money into your account to buy cryptocurrency. So, check that the account you’re considering offers favorable funding methods. The best crypto IRAs allow you to connect to your credit or debit card to transfer money directly.

6. How Security Is It

With cybercrime getting more advanced, you want to ensure your crypto investment is safe from online attacks. So, look into the security measures that a provider uses before making any commitments.

Notable security measures in crypto include data encryption and two-factor authentication.

Looking for the Best Crypto IRA? Make Sure It Meets All the Above Factors

Finding the best cryptocurrency IRA is very easy if you know what to look for. The best crypto IRA providers will definitely match all six criteria listed in this article so consider these pointers and remember to take your time selecting a crypto IRA you’re comfortable with.

Source: Plato Data Intelligence

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Blockchain

What does swapping crypto mean?

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Has the number of cryptocurrencies ever piqued your interest? Are we talking about a couple of hundred here? Maybe a zillion people? According to CoinMarketCap, that number is now well over 7,000. With so many options, you may want to test a new cryptocurrency at some time. However, how do you go about doing it?

Good news, then! Making a switch will allow you to test out a different cryptocurrency with ease. Swapping is the process of swapping one coin for another. In other words, how does it all work?

Let’s assume you have some

Ethereum, but you’d like to have Bitcoin. Certain services are available to assist you with this. Swap service providers allow you to trade your Ethereum for Bitcoin, with a value close to the actual exchange rate. To put it simply:

Why would I want to swap?

Now you know what it means to exchange cryptocurrency. On the other hand, why on earth would you want to? Anyone’s motives for wanting to swap their crypto assets for anything else are wide open. So, without further ado, here we go.

Profiting

Making money, that’s right. It’s a hit with everyone. Trading cryptocurrencies have the potential to bring you a sizable return because of how rapidly their prices can shift. You might make a lot of money by trading your crypto at the appropriate time if you are timing the market perfectly and are a little bit lucky.

Increasing your investment options by utilizing diversification

Those sudden price adjustments, on the other hand, are not to everyone’s taste. In general, diversification is seen as a valuable tool for reducing the impact of risk. Having a diverse portfolio of cryptocurrencies may help mitigate the effects of price fluctuations.

A source of ongoing revenue

Wouldn’t it be great if you could receive money for doing nothing? Staking is a method of earning additional crypto without having to do any work on your part. You might try this out by exchanging some of your bitcoin for fiat currency.

But be on the lookout!

Trading cryptocurrency is inherently hazardous, even if you don’t consider security issues. Remember how we said that by timing the market right, you might make a significant profit? If you’re not careful, you might suffer losses of all sizes. Don’t invest or trade money you can’t afford to lose, and do your homework before you get involved.

Additionally, there is generally a charge associated with trading bitcoins. You should expect a somewhat lesser return on your investment.

What is 123swap?

123swap offers an ecosystem of products and services that enables consumers to swap, keep, send, receive, earn, and invest tokens across various chains in a single place of business. To remove difficulties such as complex interface, hidden fees, and a time-consuming registration procedure, the platform has designed its conversion method to simplify the process for the end-user.

Why 123swap?

Users can pick from among more than 500 cross-chain liquidity pools (Ethereum, Binance, Polkadot, and many more). In addition to supporting the most popular protocols, the platform also offers the lowest costs and the highest annual percentage yield (APY) (Annual Percentage Yield).

123swap will differentiate apart from other DeFi platforms thanks to the following features:

In the Smart Economy, 123swap is a prominent crypto swap protocol that enables users to – Swap favoured assets in several chains; hold them; send them; receive them; earn from them; and invest in them. In this approach, crypto assets may be exchanged between peers without the need to put their faith in a third-party custodian or counterparty. The platform offers non-custodial services and aims to provide optimum safety, ease, and comfort for its users. Customers may browse all of the swaps offers gathered from the most important crypto exchanges in one location.

The platform’s goal is to develop a stronghold community. Members of the community will be able to make essential choices on things like team tokens vs. advisory tokens, lock length, and so on through a fair voting mechanism.

Problems solved by 123swap

Exchanges performed by hand are old-fashioned and time-consuming. By utilizing smart contracts, the platform will streamline and automate the swapping process. Smart and autonomous financial management will be available in one location thanks to the cross-chain smart contracts. The platform would promote decentralized financial management via smart contracts. As a result of its technological innovations, 123swap is poised to surpass the competition, improve speed, and establish itself as the world’s leading exchange.

Final Thoughts

Swapping is the process of swapping one coin for another. Certain services are available to assist you with this. You might make a lot of money by trading your crypto at the appropriate time. If you’re not careful, however, you might suffer losses of all sizes. 123swap is poised to surpass the competition, improve speed, and establish itself as the world’s leading exchange.

The platform would promote decentralized financial management via smart contracts. Users can choose from among more than 500 cross-chain liquidity pools (Ethereum, Binance, Polkadot, and many more).

Source: Plato Data Intelligence

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Blockchain

How to Find Crypto Exchanges for Safe Transactions

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As a result of the Covid-19 epidemic, global markets have begun to appreciate the potential of cryptocurrency. Yet, it was previously seen as too volatile and fringe to embrace any sizeable corporate body or company. 

You can buy, sell, and trade cryptocurrencies on top crypto exchanges. You can’t get or sell digital assets unless you have access to a cryptocurrency exchange online. 

Where to find the best crypto exchanges with a fair conversion rate? Look at the list of crypto exchanges at https://coincub.com/. You can see a calculator where you can find out which converter you need to choose depending on how much you need to swap for 1 coin and your location. This way, you can see a chart with many converters that may suit your needs for safe transferring.

Choosing the proper crypto exchange for both novice and experienced advanced crypto traders has been difficult. When you find that one, you can be sure you are safe! 

What to Look for to Find the Best Cryptocurrency Exchanges

Most exchanges primarily allow you to convert Bitcoin, into other digital currencies, such as Ethereum or Litecoin. Your scope may vary when selecting an exchange to convert money for crypto. You may prefer an exchange that supports particular cryptocurrencies, trading pairings, and extra features like margin trading or over-the-counter (OTC) transactions.

How to find an exchange that satisfies your fundamental needs? Consider the following aspects to take into account:

  • Security. By far, one of the essential elements of a transaction is safety. If an exchange is not secure, your cash might be stolen, rendering any other benefits it provides useless. No one likes to lose money; therefore, consider the following factors in this regard;
  • Technology. The web URL of the top crypto exchanges should begin with HTTPS. Two-factor authentication should be used for login security. Customer deposits should be kept offline in what is known as “cold storage.” Auditing tools that monitor exchange activities 24/7 and send SMS with email notifications provide exchange clients additional security guarantees. For optimum protection, allow your IP address or withdrawal wallet addresses;
  • Legal considerations. Choose an exchange from the same nation since this can help you comply with regulatory changes. It should be noted that certain exchanges only support a restricted number of countries;
  • Transparency. The most trusted crypto exchanges reveal addresses, teams, cold storage addresses or assist in the verification of their reserves in other ways, such as audit information;
  • Liquidity. The more liquid a specific exchange is, the larger the trade volume. Liquidity allows transactions to be completed more quickly, simply, and without coping with price fluctuation. Check to determine whether an exchange offers “locked-in” pricing, which assures you the price at the time of your transfer sessions even if it does not settle right away;
  • Costs. Examine all of the fees that an exchange charges. They’re typically less than 1% of each transaction and may drop as your trading volume grows. Examine the withdrawal costs. Some exchanges are known to charge exorbitant withdrawal fees for specific cryptocurrencies. Check the deposit fees as well.

Ultimately, keep in mind that crypto and its infrastructure are still in the early stages of development so that things might change fast. Numerous decentralized exchanges are already in the works, and many experts believe they’ll permanently alter existing exchanges.

Furthermore, laws may be imposed, and new technology or issues may emerge. So keep up with the news and stay informed. The best cryptocurrency exchange is unique to each individual, so conduct your research and be cautious while doing so.

Source: Plato Data Intelligence

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