The number of BTC locked in DeFi has reached a record high. Will Bitcoin face the "black hole effect" of liquidity?
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1. Cryptocurrency Industry Trends
Funds flowing into large encrypted asset managers have been strong since 2020, Reuters reported on June 5. Grayscale managing director Michael Sonnenshein said that since April, the firm's bitcoin investment fund has ballooned from $2 billion at the end of the first quarter to $3.5 billion on June 2. In the past week alone, Grayscale added 9,503 bitcoins to its trust assets, while miners produced 6,863 bitcoins during the same period.
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Grayscale’s buying behavior shows that the amount of Bitcoin purchased by institutional customers has far exceeded the amount of Bitcoin mining. The transaction price of Grayscale’s Ethereum Trust (ETHE) is $239.50 per share, and each ETHE represents only 0.09402547 ETH, which means that the premium of Grayscale’s Ethereum Trust Fund exceeds 1000%. The currency has paid a huge price, but this also fully reflects the enthusiasm of institutional investors for the crypto market.
2. The trading volume of encrypted derivatives reached 602 billion US dollars in May, and the trading activities of options increased significantly
CryptoCompare also found a significant increase in trading activity in crypto options. Trading volume on options exchanges more than doubled in May to $3.06 billion. On May 10, the day before Bitcoin’s halving, $196 million worth of transactions were completed through Deribit, making it the largest single-day transaction in the platform’s four-year history. Similarly, monthly trading activity in CME crypto options has increased 16-fold from April. Like Deribit, there has been a significant uptick in trading activity around the Bitcoin halving event.
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Like Grayscale’s large-scale purchase of cryptocurrencies, the prosperity of the cryptocurrency derivatives market is a manifestation of the gradual maturity of the market. According to real-time data from Coingecko, the current average monthly spot trading volume of the crypto market is nearly 2 trillion US dollars, and the trading volume is more than three times that of the derivatives market. However, in mature traditional financial markets, the trading volume of derivatives often far exceeds that of spot transactions, indicating that the derivatives market still has a long way to go. At the same time, the gradual prosperity of the options market also shows that professional traders are pouring into the encryption market.
According to news from AMBcrypto on June 3, the number of bitcoins locked in DeFi hit a record high. On June 3, the number jumped to 4,042, a 2-fold increase from 1,390 in April. The amount of Bitcoin locked in DeFi exploded last month after Maker’s governing body voted to include WBTC as collateral. Since then, the total value locked in WBTC has also risen sharply, especially hitting a new high on June 2, all the way up to $39 million.
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The BTC locked in the Ethereum Defi ecosystem includes two forms, one is BTC itself, and the other is BTC in the form of ERC-20, such as WBTC, GBTC, TBTC, etc. The skyrocketing amount of BTC locked in Defi is directly related to WBTC being allowed as collateral. The number of BTC locked in Defi continues to rise, indicating that Bitcoin liquidity is flowing into the ETH-based Defi ecosystem and injecting huge value into the Ethereum ecosystem.
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2. Mining dynamics
2. Mining dynamics
1. From the media: Sichuan and Yunnan power systems crack down on direct power supply mines
According to Wu said the block chain news on June 5, the power systems of Sichuan and Yunnan provinces are making efforts to rectify direct power supply mines. Among them, Sichuan issued a document emphasizing the protection of compliant mines and cracking down on mines with direct power supply. Some mines with direct power supply have been cut off. Under the influence of the epidemic, the profit of the State Grid was negative in the first quarter, and it hit the traditional direct power supply mines, which is conducive to the consumption of the interests of the mines in the demonstration area and the State Grid, but it is tantamount to a disaster for small hydropower and direct power supply mines . The miners in Sichuan said that the Sichuan State Grid issued a document on May 28, requesting to regulate and control the power supply of illegal factories, but to avoid "one size fits all" regulation and governance methods. For those who meet the policy conditions and are willing to connect to the public power grid, we will do our best to provide good services; for power plants that refuse to rectify their unauthorized direct supply behaviors and power supply companies that violate regulations, deal with related issues in accordance with laws and regulations.
According to the Beijing News on May 31, recently, the police in Daqing, Heilongjiang, suspected that there was a den of electricity theft near a certain village based on the power data provided by the oil field. The police found suspicious "grave mounds" in the nearby woodland, but no monument was erected. And an entrance was found near the "grave head", which was confirmed to be a den of illegally stealing electricity to produce bitcoin after investigation. Earlier in April, Daqing had cracked an oilfield power theft mining case and confiscated 54 illegal BTC mining machines.
Comments:Electricity is the "fuel" of the Bitcoin mining industry. Cheap electricity means greater profits and stronger competitiveness for the mining industry. Therefore, miners always tend to look for cheaper hydropower resources. Direct power supply from hydropower stations is a good choice. However, as the scale of the mining industry becomes larger and larger, policies will have a stronger influence on Bitcoin miners. For example, the water and electricity consumption policy in this year's wet season means that there is no way out for small miners who do not meet the requirements . At the same time, some small miners do not hesitate to use illegal means to steal electricity in order to obtain greater profits, but they will be punished without exception.
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3. Opinions of the big Vs in the industry
According to Cointelegraph, the CEO of Kingdom Trust, a financial custody company with more than $13 billion in assets under management, Ryan Radloff said in an interview that the $28 trillion U.S. retirement fund will soon be open to cryptocurrencies. "Right now, all that money is going through a generational change, and almost no Bitcoin has penetrated that market today." According to Ryan Radloff's prediction, the big wave of funds from the pension market moving to the cryptocurrency market will start with 7.1 million Bitcoin owners. American currency.
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As the only compliant channel in the United States that allows pensions to enter cryptocurrency, Grayscale is currently increasing its holdings of Bitcoin, Ethereum, Ethereum Classic and other cryptocurrencies, but investors have also paid a huge premium for this. For example, Grayscale The newly launched ETHE trust has a premium rate as high as 1000%. If there are more channels for pensions to enter the encryption market in the future, then this $30 trillion asset will inevitably push the encryption market to unimaginable heights.
On June 1, BCH supporter Roger Ver tweeted today, I don’t care what the code name is, this token can bring more economic freedom to the whole world. Our goal is to build a peer-to-peer electronic cash system for the whole world. Bitcoin Cash is the most likely to achieve this.
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4. Blockchain industry empowerment
4. Blockchain industry empowerment
1. Hainan Free Trade Port is simultaneously listed in 11 key parks
According to Shanghai Securities News, on the morning of June 3, the listing ceremony of key parks in Hainan Free Trade Port was held in 11 key parks in the province. Among them, Hainan Ecological Software Park is the main carrier and platform of Hainan's Internet information industry. It is led by the new generation of information technology industry, especially the blockchain, and vigorously develops digital cultural creation, digital finance, digital health Internet, mobile Internet, big data, district Block chain, cloud computing, artificial intelligence, information security and other industries.
2. Data: Government blockchain project procurement increased by 67% year-on-year in the first half of the year
