Last Chain Weekly: Bitcoin started adjustment, DeFi project exploded collectively
In the fourth week of 2021, the Bitcoin market ushered in another adjustment during the year. After several unsuccessful impacts on the $40,000 mark, the market began to decline on Wednesday. With bad news such as tightening overseas regulations, Bitcoin dropped to as low as 28,796 U.S. dollars, and the total market value of cryptocurrencies once fell below the trillion mark; the market value of Bitcoin also dropped from 71% to 60%.
On the other hand, as Bitcoin began to adjust, DeFi tokens and Ethereum began to strengthen. The market value of Ethereum has risen from 10% to 15%. DeFi tokens such as Uni and Sushi have also increased significantly. The total market value of DeF projects exceeded US$40 billion, setting a record high.
Data on the chain
Bitcoin's weekly transaction volume was 13.2793 million BTC, an increase of 0.44% month-on-month; while Ethereum's on-chain transaction volume was 28,449,800 ETH, a month-on-month decrease of 8.68%.
After excluding the influence of duplicate data, the actual transaction volume on the Bitcoin chain in a single week was 4.2026 million BTC, a decrease of 14.1% from the previous month. As Bitcoin began to decline and adjust, transaction activity and activity on the Bitcoin network have dropped to a certain extent.
Although the activity on the chain has dropped, there are some good news:
The Bitcoin network difficulty was raised to 20.83 T over the weekend, which is the highest level ever.
The increased network difficulty means the increase of network computing power, which means that more miners and mining machines are re-entering the market, whether it is restarting the old mining machine when the market goes up, or the new computing power machine is connected to the network. The continued upward computing power recharges the Bitcoin network more confidence, even if the premise of all this is that mining is profitable.
Miner income
Last week, Bitcoin miners' income was 6,890 BTC, or about 236 million U.S. dollars, a decrease of 12.57% from the previous month; Ethereum's miners' revenue was 144,500 ETH, or about 184 million U.S. dollars, an increase of 5.83% from the previous month.
Although the earnings of Bitcoin miners have fallen for two consecutive weeks, they are still at historical highs overall. Under the dual blessing of Ethereum's recent strong performance and the high fees on Ethereum, Ethereum miners still make a lot of money.
DeFi
At the same time that Bitcoin began to adjust its trend, the tokens and various counterfeit projects on Ethereum began to take over and there was a flurry of demons. Among them, DeFi project tokens became the protagonist of this week.
As the DeFi protocol on Ethereum continues to rise, and is approaching the integer mark of 40 billion US dollars, this week, the Dex protocol governance tokens represented by Uni and Crv have begun to collectively attack. It even took the top spot in the mainstream projects.
This kind of collective skyrocket is easily reminiscent of the cottage in the background of the bull market and the scene of crazy air pulling. But unlike the previous bull market, Dex may be the first agreement in the current DeFi concept. We can see that the transaction volume of the Dex protocol on Ethereum has shown a continuous upward trend, and the single-day transaction volume has reached the order of billions of dollars.
The leading players in Dex: Uni, Sushi, Crv, etc. not only account for the main trading volume of Dex on Ethereum, but also a large amount of real lock-up funds behind it, which seems to be completely different from the previous empty speculation expectations and concepts.
On the whole, our analysis and predictions in last week's weekly report may be becoming reality: As Bitcoin begins to fluctuate, the market's focus seems to be beginning to focus on more other sectors. But we also clearly see that the altcoins outside the DeFi sector seem to be still in a semi-dormant state, and most of the projects are still far away from their previous highs. In this context, it may be a better strategy to lock in relatively stable opportunities by paying attention to on-chain indicators such as the amount of locked positions of DeFi projects.