TI Weekly Market Review: New Year’s Bitcoin Expects Hitting $30,000, DOT Surges with Confident Expectation. Weekly Market Review by TokenInsight

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Bitcoin became the most impressive investment asset in 2020. The price of Bitcoin rises for nearly four times in 2020. According to the China International Capital Corporation (CICC)’s ‘Blockchain and Cryptocurrency Research Report’, the annual return of Bitcoin surpasses all other investment assets’ return. On 31 Dec 2020, Bitcoin price hit all-time-high again, contributing a perfect ending for cryptocurrency in the last day before new year. Bitcoin successfully attracted the attention of institutional investors and the traditional financial market. This kind of ‘value recognition’ for Bitcoin gives the cryptocurrency industry epoch-making significance.

Bitcoin became the most impressive investment asset in 2020. The price of Bitcoin rises for nearly four times in 2020. According to the China International Capital Corporation (CICC)’s ‘Blockchain and Cryptocurrency Research Report’, the annual return of Bitcoin surpasses all other investment assets’ return. On 31 Dec 2020, Bitcoin price hit all-time-high again, contributing a perfect ending for cryptocurrency in the last day before new year.

Bitcoin successfully attracted the attention of institutional investors and the traditional financial market. This kind of ‘value recognition’ for Bitcoin gives the cryptocurrency industry epoch-making significance.

DOT shows remarkable performance this week, suggesting a flourish for Polkadot and DeFi market after New year.

Mainstream assets’ yearly performance, chart from Dec. 28. Source: Bloomberg, CICC

Bitcoin: Next Step, $30, 000

The Christmas holiday did not make the crypto market cool a little seemingly. This week, the price of Bitcoin is close to $29,400, just one step away from the $30,000, and The trading volume of Bitcoin is also increasing steadily during the Christmas holiday. The spot trading volume has reached $35.79B, and the perpetual contract trading volume has reached $299.1B. Bitcoin is creating miracles every week.

BTC price in the last 30 days, chart from 9pm EST, Dec. 30. Source: tokeninsight.com
BTC perpetual historical trading volume in the last 30 days, chart from 9pm EST, Dec. 30. Source: tokeninsight.com

The rising is not without indication. Last week, Whalemap analysts found that the Bitcoin Whales (referring to the major traders in the Bitcoin market) clusters have formed around $23,409, which means that a large number of investors with sufficient funds buy bitcoins at this price and store them. As a result, Bitcoin’s supply reduced in the short-term, which pushed the price of bitcoin to continue to rise after it stabilized at the $23,000 line.

Bitcoin whales’ distribution map, Sources: whalemap.io

In addition, the options market reacts faster before this week’s rise. On 28 Dec 2020, derivative exchange Deribit’s Bitcoin vanilla options with $32,000 struck on 24 Sep 2021 had reached $7,500, while $40,000 options had reached $5,800.

Moreover, the Bitcoin options’ term structure indicated that the implied volatility of Bitcoin forward options expired in September is near the 85% line, which means that investors in options market believe that the price of Bitcoin is expected to reach between $32,000 and $40,000,  and it will be stable in an upward trend at present.

As of press time, the $32,000 options struck on 24 Sep 2021 in the Deribit Options Exchange has reached $9,312, while the $40,000 options has reached $7,205. The overall sentiment of the market is optimistic. From the perspective of the options trading distribution chart, many traders choose to sell put options to lock in the spot price (Note: After selling put options, if the buy-side executes the contract, the seller must buy a certain amount of a specific commodity from the buy-side of options. When the investor expects the market price of a specific commodity to rise, he can choose to sell put options). Looking forward to the moment of Bitcoin breaking through $30,000.

Bitcoin options price from Deribit, chart from 3:30 EST, 31 Dec 2020, Sources: deribit.com
Bitcoin options trading type distribution and term structure from Deribit, chart from 3:30 EST, 31 Dec 2020, Sources: gvol.io

Binance Supports Polkadot, DOT Got Potential

DOT shows remarkable performance this week, rising from $5 to the highest $7.7, and stabilizing around $7.4, performing a 178.95% rising compared with last week. The strong surge is relevant to the support from Binance investing $100million to Polkadot for its ecosystem development.

As the pioneer in the cross-chain area, and founded by Ethereum co-founder Gavin Wood, Polkadot has always been an expected ecosystem for the community and DeFi market. 

DOT price changes in the last 30 days, chart from 9pm EST, Dec. 30. Source: tokeninsight.com
DOT perpetual historical trading volume in the last 30 days, chart from 9pm EST, Dec. 30. Source: tokeninsight.com
BTC/ETH/DOT trading volume changes in the last 7 days, chart from 9pm EST, Dec. 30. Source: tokeninsight.com

The positive reactions from the futures market are even more obvious. On the one hand, the futures price of DOT has risen to more than $8, which is 6% higher than the spot price. Investors' pursuit of DOT is evident. On the other hand, as of press time, the funding rates of DOT perpetual contracts maintain at above the 0% line, and recent funding rates rise up obviously, which shows that there are enough more investors with bullish attitudes in the market than investors with bearish attitudes. Based on the endorsement of the top exchanges and the gradual expansion of the Polkadot ecosystem, DOT has sufficient growth potential in 2021.

DOT option price changes in the last 30 days, chart from 9pm EST, Dec. 30. Source: tokeninsight.com
DOT perpetual’s fund rate changes chart from 9pm EST, Dec. 30. Source: tokeninsight.com

Highlights Picked by TokenInsight

Coinbase, Binance and OKCoin Exchanges Suspend XRP Transactions

U.S. crypto exchange OKCoin is suspending XRP trading and deposits on January 4, 2021, until further notice. Coinbase will fully suspend XRP on Tuesday, Jan. 19, 2021, at 1 p.m. ET. Similarly, Binance will suspend XRP transactions on 14 Jan 2021.

Binance Launches Vanilla Options Contracts

Crypto exchange Binance on 28 Dec 2020 announced a new type of Bitcoin options contract that simplifies things for traders and lets them issue their own contracts for the first time.

Japanese Internet Giant Licensed to Issue First JPY-Pegged Stablecoin in New York

The New York Department of Financial Services has issued a trust charter to GMO-Z.com Trust Company, allowing it to “issue, administer and redeem” Japanese yen (JPY)- and U.S. dollar-pegged stablecoins in New York.

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