market overview in the second quarter of 2021

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The sharp decline in the value of bitcoin led to the fact that its share in market capitalization fell below 50%. This comes amid the rapid growth of Dogecoin and the growing popularity of stablecoins. At the same time, the market itself is in the red for the first time in 15 months. Overview of the main events of the second quarter – on the quarterly research Bloomchain.

To read or download the Bloomchain study “Cryptocurrency market in the second quarter of 2021”, please follow the link

Market capitalization

For the first time in five quarters, the cryptocurrency market has entered the red. During the period April to June 2021, its value fell by a quarter – from $1.74 to $1.3 billion.

Bitcoin’s decline turned out to be more real. During the reporting period, quotes fell by 40% at a time, which corresponds to the level at the beginning of the year. The dominance of the largest cryptocurrency continues to weaken – in three months its share in the total market capitalization decreased from 60% to 46%.

The second place is held by Ethereum, its share increased from 11.2% to 16.2%, Tether returned to the third place. It passed Binance Coin again. For the first time, the cryptocurrency “meme” Dogecoin entered the top 5 cryptocurrencies in terms of capitalization.

Read also: Cats rule the Internet, and DOGE rules the crypto market

Source: Bloomchain Research

The seven new tokens were among the 30 largest cryptocurrencies by capitalization at the end of Q2, including stablecoins Binance USD and Dai, as well as Ethereum Classic. In general, at the end of the quarter, the share of the three and ten largest cryptocurrencies in the total market cap fell to 66% and 80%, respectively.

stablecoin

Among the largest stablecoins – USDT, USDC, BUSD, DAI (chosen because they are included in the Ethereum blockchain) – Tether holds a leading position. It accounts for 44% of this coin supply.

The share of Tether’s main competitor – USDC – is 33%. During the reporting period, its capitalization more than doubled. Tether’s capitalization had increased by one and a half times during the same time.

Read also: lies, big lies and mooring

Source: Bloomchain Research

Profitability

When choosing a buy and hold strategy, only one of the five largest cryptocurrencies that can bring losses to investors – it turns out to be bitcoin. At the end of the second quarter of 2021, for every $100 invested, he could only return $60.

The rest of the top 5 cryptocurrencies will bring profits to investors. Investing in Dogecoin can be the most profitable: every $100 invested can generate an additional $420. Due to the sharp increase in the value of this coin at the end of the 2021 quarter, the average ROI for the top 5 cryptocurrencies is 82%. This is an order of magnitude less than the previous quarter’s indicator, which was over 350%.

Binance Coin nearly doubled in the first half of the quarter before quickly dropping into early April.

Read also: what or who triggered the 15 times growth of Binance Coin

Source: Bloomchain Research

Bitcoin: spreads and correlation with other assets

By the end of the first half of the year, the difference between the maximum and minimum bitcoin prices ($64,863 and $28,723), respectively, exceeded $35K and became the historical maximum. For comparison: at the end of 2020, it was more than $25 thousand.

Source: Bloomchain Research

The correlation between bitcoin overnight returns and traditional assets (including gold, oil and US stocks) is significantly lower than the correlation between asset prices for the quarter. This shows a weak linear relationship between fluctuations in major cryptocurrencies and classic benchmarks.

You can read more about the relationship between these indicators in our research.

Source: Bloomchain Research

Miner’s income

A measure of the average daily earnings of miners on the bitcoin network in the second quarter of 2021 immediately fell 64%, approaching the $20 million figure redistributed among large pools amid mining bans in several Chinese provinces.

Read also: China will stop mining bitcoin, that’s good

At the same time, the average commission per transaction on the bitcoin network in the second quarter of 2021 increased from $ 16.54 to $ 17.5, on the Ethereum network it decreased slightly – from $ 14.93 to $ 14.55. During the year, these indicators have increased by almost 10 and 35 times, respectively.

The share of miners’ commission income on the bitcoin network remains at the level of the first quarter and is 11% of the total remuneration. A similar indicator on the Ethereum network is down 10 p.m. and by 42%.

Source: Bloomchain Research

Read also: Ethereum Generous Commissions – Bug or Scam?

Crypto wallet

At the end of the quarter, the average monthly number of active wallets where the supply of bitcoin money is stored decreased from 1.1 million to 854 thousand, their share of which exceeds 71%.

Source: Bloomchain Research

Between April and June, the number of the largest BTC wallets owned by cryptocurrency exchanges increased slightly: from 17 to 18 units. Six of them are owned by Okex, three by Kraken, two by Binance and Bitfinex, one by Huobi.Bitfinex, CoinCheck, BITMEX and Poloniex.

The biggest wallet is still owned by Binance. At the time of publication of the material, the balance was equal to 288.1 thousand BTC ($11 billion).

DeFi Market

In May 2021, the volume of blocked funds in decentralized financial markets (DeFi) updated to an all-time high, but at the end of the quarter fell by about a third. At the end of June, in services based on Ethereum, the number was $ 53.51 billion, based on Binance Smart Chain (BSC) – $ 24 billion.

The largest share of funds in Ethereum-based DeFi services is still calculated from loans – accounting for 56% of the total market volume. Decentralized exchanges followed (28%).

Among services based on BSC, projects from the category “Decentralized exchange, NFT and games” lead (36%). At the same time, most of the funds blocked in it fall on the Pancake Swap service. In second place is the landing service (21%).

Read also: Credit Bubbles and Multiple Profits – What’s Happening in the DeFi Market

Source: Bloomchain Research

NFT

The market for NFTs (non-fungible tokens) continues to grow, with their trading volume reaching $750 million between April and June, a 48% increase over the previous quarter.

Source: Bloomchain Research

Read also: how the NFT market works

The two largest segments, collections and art, accounted for 66% and 14% of the total NFT trading volume, respectively.

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