TI Weekly Market Review: BNB Became the 3rd Largest Crypto, Bitcoin is Suspected Been Shorted by Institutions, and Altcoins Fly High

TI Research

After the Chinese New Year, the crypto market still rallies in the ‘Bull’. Supported by ‘crypto celebrity’ Elon Musk and wealth effects brought by the institutions’ players, bitcoin successfully breakthroughs $50,000 and stabilizes around at the highest position $52,000. However, traces indicate that some ‘counterparties’ are shorting bitcoins and the call-back may come anytime. However, at least for now, the crypto market is still at its peak. Driven by the bull market and the good performance of DEX PancakeSwap on the Binance Smart Chain (BSC), the price of BNB rose by more than 7 times this month, becoming the third-largest market cap crypto. Besides, PancakeSwap’s daily trading volume once surpassed Uniswap, the leading DEX in DeFi. Among the non-Ethereum public chains, Polkadot has been favoured in the long-term. With the endorsement of major international institutions, its market cap ranked at the sixth temporarily. Overall, compared with the end of 2020, the crypto market has undergone a shuffle, which has generated more potential investment opportunities but with higher volatility.

Bitcoin Breakthrough $50,000, but Indicators Hints a  Callback

People seem to have become accustomed to the continual jump of Bitcoin since the bull market. From $30,000, $40,000 to $50,000, the market's reaction has been much calmer.

According to the Bloomberg TV interview with Binance Holdings Ltd. CEO Changpeng Zhao, Zhao expressed his confidence and very positive outlook of the crypto market.

‘I think we have just seen the tip of the iceberg of the crypto market, $50k is just the beginning. If you look at the last rally, it starts from $1,000 in 2013, after nearly 3 years, to $20,000, then we had the 3-years retrace. Right now we just past the previous peak of about 2.5 times. The fundamentals are much stronger than 3 years ago, we see a lot of users and institutions came in. ’

Binance CEO Changpeng Zhao, Source: Bloomberg
Bitcoin price in the last 30 days, chart from 8:00pm EST, Feb 18. Source: tokeninsight.com

However, this time is obviously different from before. Numerous signs indicate a callback and major volatility may be on the way.

From the perspective of trading volume, compared with last week, the trading volume of Bitcoin spot, Ethereum spot, and Ethereum perpetual contracts has shrunk. Generally speaking, the trading volume of spot and perpetual contracts is ‘simultaneous advancement and retreat’, however, the trading volume of bitcoin perpetual contracts rose by 28.58% abnormally, and the total weekly trading volume reached $732.5B. This situation may mean that there is a strong speculative mood in the market. After speculative sentiment rises abnormally, it will often bring about a larger market callback.

Bitcoin's recent spot and perpetual contract trading volume changes, and the abnormal growth of perpetual contracts is obvious. Source: tokeninsight.com

Some signs from the delivery contract and options market also provide clues for a possible callback. The Chicago Mercantile Exchange (CME) Bitcoin futures trading data disclosed this week showed that hedge funds increased additional short positions valued at $1.24B in Bitcoin futures on February 13, but there were also assets managers and other undisclosed investors who increased their long positions in Bitcoin futures, which values $1.281B totally.

It now appears that the market has a fierce long-short game around Bitcoin, and it seems that the bears are relatively more emboldened. On the Deribit options exchanges, on February 11,  the largest daily premium volume in the history of the crypto options market was recorded. which reached $77.81M and focused on buying and selling call options mostly. Moreover, on February 20 and 26, a large number of options and futures will expire for delivery. During this period, the market is likely to have violent swings, and the bears’  actions may lead to a short-term significant callback.

The distribution of Bitcoin futures trading on the Chicago Mercantile Exchange (CME). Source: the block
Bitcoin Options trading volume changes and the distribution of options long and short on February 11. Source: gvol.io

‘The crypto market should be larger than the fiat market. Because with cryptocurrencies, there are a lot more use-cases, and possibilities now. This is similar to Uber’s market size being bigger than the taxi’s, so I think it is very clear we are just at the very beginning. '

Binance CEO Changpeng Zhao, Source: Bloomberg

Exchanges Tokens and Blue Chip: BNB's Market Value Soars to Third, and DOT Takes the Fourth

The highlight of this week is none other than BNB. As of 3:00 am on February 19th, BNB's price has reached a high of US$268 per token, with a market value of over $40B, surpassing Tether in one fell swoop and taking the third place in market value. Compared with the end of last year, the value of BNB has increased by more than 7 times, and the daily trading volume has increased by more than 10 times, which makes it become one of the mainstream cryptos.

BNB price in the last 30 days, chart from 3:00am EST, Feb 19. Source: tokeninsight.com
On February 19, BNB's daily trading volume exceeded $6B, reaching a new peak. Source: tokeninsight.com

The high gas price of Ethereum and the hot performance of PancakeSwap draw people’s attention to BSC and its exchange token BNB. Zhao has tweeted plenty to celebrate the rising of its token and reveal his opinions about this boom.

‘It started from the centralized platform exchange token, and it has a history that outperforms even better than bitcoin over the last three years. More reasonably, it is contributed by Binance smart chain, which is a decentralized blockchain that a lot of new DeFi projects are running on it. I think the current boom is caused by that. More fundamentally, it is because BNB has a smaller market cap than bitcoin, making it actually easier to grow. Meanwhile, there are more activities happened on BSC than on Bitcoin. I think Bitcoin acts more like a global reserve in the cryptocurrency space, while BNB has more activities going on. ’

Binance CEO Changpeng Zhao, Source: Bloomberg

Among the Blue Chips, DOT's performance is the best. Thanks to the good ecology of Polkadot and the endorsements from top institutions such as Goldman Sachs, JP Morgan Chase, and UBS, the price of Polkadot's DOT has risen from around $5 to over $30, with a net increase of more than 20% this week, which became the best performing non-BTC/ETH cryptos in 2021Q1 together with BNB. If you bought and held DOT and BNB from December of last year, the realized investment income has exceeded 6 times the cost.

DOT price in the last 30 days, chart from 4:00am EST, Feb 19. Source: tokeninsight.com

It is worth noting that exchanges with their own public chain have great potential in their own exchange tokens. With the daily trading volume of PancakeSwap and MDEX surpassing Uniswap, not only BNB, but also Huobi exchanges token HT also achieved good performance this week.

 It is foreseeable that as the status of the exchange's own public chain in DeFi gradually rises, the performance of the public chain in the future will have a significant impact on the performance of the exchange token. Therefore, continuous tracking of different public chain ecology is very necessary.

Trading volume & market cap summary info in the last 7 days, chart from 8pm EST, Feb 4. Source: tokeninsight.com

Highlights Picked by TokenInsight

Coinbase Ventures, Paradigm Invest $12M in Synthetix DeFi Platform

Decentralized trading platform Synthetix has raised $12 million from venture capital firms Coinbase Ventures, Paradigm, and IOSG. The raise looks to be a rare occurrence of VCs investing through the purchase of a platform’s native token directly from its treasury rather than wiring funds to its founders.

Collider Ventures leads a $2.7m strategic contribution to Nexus Mutual Blockchain Based Insurance alternative products

Collider Ventures announced a joint investment of $2.7 million in DeFi insurance platform Nexus Mutual with other investors. Investors also include some institutional blockchain and digital asset investors, including 1Confirmation, Blockchain Capital, Version One, Dialectic, and several angel investors.

KPMG, BitGo, Coin Metrics Launch New Offering to Drive Institutional Adoption

According to Coindesk, KPMG, BitGo, and Coin Metrics announced Thursday a combined offering that seeks to manage and monitor risks on public blockchain networks.




TI Research

TokenInsight is a data and research organization for the digital asset market. TI provides comprehensive asset-related data and comprehensive and timely information and research services for digital assets.

Use TokenInsight App All Crypto Insights Are In Your Hands