“Money is flowing out of conventional assets into Bitcoin due to the escalating risks of global currency devaluation, technology disruption, social dislocation & political uncertainty. This is not a “rally” or “bubble” - it’s a chain reaction spreading like a fire in cyberspace.” - Michael Saylor, MicroStrategy

Bitcoin, the leading global digital asset, has ascended 232,61 percent between January and December of 2020. Despite the macro-induced momentarily weakness in March, Bitcoin has performed exceptionally well. The rally has been distinctively driven by institutional appetite, with companies like MicroStrategy, Ruffer Investment Company, and Square entering the space. However, past performance is…


The digital asset market, like any other market, is fundamentally driven by human input. At the end of Q3 this year, the Bitcoin (BTC) network recorded 351 417 daily transactions and the industry continues to be mostly retail-aligned. Retail investors are particulary exposed to emotional investing and trading, furthermore the access to higher-level information is scarce and limited. Additionally there’s a clear information asymmetry, granting a de facto edge to institutional investors.

Mimetism and Investing

The mimetic theory can be used to interpret retail investor behavior, yet it also might (more or less) apply to institutional investors. The mimetic theory of desire is…


This article was additionally published by Coinmotion, the leading digital asset exchange in Nordics.

Arguably the most widely known investment product of digital asset industry, Grayscale’s Bitcoin Trust (ticker: GBTC), has evolved into the de facto indicator of bitcoin’s market sentiment. One of the most interesting aspects of GBTC has been its premium over bitcoin’s price, exceeding 132,6 percent in late May 2017.

“The premium is the amount you’re willing to pay to not custody your own private key, and still get exposure to the underlying asset.” - Ryan Alfred

In addition to Bitcoin Trust, Grayscale also manages Ethereum Trust…


This article was additionally published by Coinmotion, the leading digital asset exchange in Nordics.

Metcalfe’s Law was originally presented in 1980 by Robert Metcalfe, describing “compatible communicating devices”. The theory was later refined in 1993 by George Gilder, referring to Ethernet. In its basic form, Metcalfe’s Law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n²), or n(n − 1)/2, where n equals to number of nodes. n(n − 1)/2 is proportional to n² asymptotically.


This article was additionally published by Coinmotion, the leading digital asset exchange in Nordics.

Summary

  • Construing UTXO age distribution allows for pinpointing crucial bitcoin market cycles.
  • By historical data, multiple key UTXO bands are correlated with BTCUSD price movements.
  • Most recent early 2020 UTXO and price data shows distinct re-accumulation.
  • Address sizes between 0,01 and 1 BTC indicate escalating accumulation in retail segment.
  • Institutional investors, i.a. Renaissance Technologies LLC, are entering the industry.

Forewords

Unspent output from bitcoin transactions, or UTXO, offers notable possibilities for analysing the cryptocurrency market. Inside the bitcoin blockchain, every transaction creates a new UTXO, and the certain…


The unprecedented spread of COVID-19 has been a harsh wake-up for many. In addition to its imminent threat to certain risk segments, the virus opened our eyes to the fragility of our centralized infrastructure. Those associated in decentralized systems, like bitcoin, have probably gone through this thought process before: Decentralized structures are more robust than centralized, advantages of diversification, etc. On these grounds we summarized seven upcoming paradigms shifts and why we are, more than ever, bullish on digital assets.

While we’ve seen recessions and pandemics before, the indelible uncertainty on future is what really sets COVID-19 apart from previous…


Correlation between bitcoin and gold has been one of the favourite industry-related topics lately. Bitcoin’s key narrative as “digital gold” has been relevant as the asset is considered to be in the same scarce resource segment with physical gold. In 2019, bitcoin’s correlation with gold grew from May negative values to positive 0,17 in early July. Towards Q1 2020 the correlation has been weakening with 0,09 by the release of this blog post.


Understanding bitcoin’s market behaviour requires deep assimilation into key fundamental indicators. In traditional stock market, P/E ratio (price to earnings ratio) has been the de facto instrument for security valuation. P/E ratio simply mirrors share price to its equivalent earnings per share. Rising P/E indicates either high growth potential or overvaluation.

In digital asset industry, the closest indicator to P/E is NVT, or network value to transaction value. NVT is calculated by dividing the Network Value (market cap) by daily USD volume transmitted through the blockchain. Furthermore to NVT, MVRV and its derivative MVRV-Z are indicators of choice for the…


By dcresearch on The Capital

Bitcoin, the best performing asset of 2010s with 9 000 000 percent growth since July 2010, is an excellent instrument for portfolio diversification. While S&P 500 index performed notably well in 2019, surging over 29 percent, bitcoin’s performance was in its own class. Bitcoin rose over 90 percent during 2019, peaking close to 14 000 USD in late June. Additionally, bitcoin has been defending its position as the leading digital asset with growing dominance in 2019, meanwhile small cap digital assets have lost their relative market share.

Bitcoin is well known (or notorious) for its distinctive high volatility, during 2019…


The price performance of altcoins (alternative digital currencies to bitcoin) is by default measured in US dollars. Although USD is a good benchmark per se, its slightly inflatory features frequently give an overly optimistic perspective on the performance of digital asset.

Benchmarking altcoin’s performance compared with bitcoin gives us a coherent view on the digital asset market. As bitcoin is the de facto source of liquidity, it’s a perfect reference point for alternative assets.

When deciding which altcoins are worth allocating money into, dividing them into oscillators and denegerators is a sound approach. …

dcresearch

Industry-leading research & consulting for bitcoin, digital asset, and fintech markets.

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