A Review of July‘s Cryptocurrency Market and Data Analysis

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Data Analysis

1.Market Performance of the Top 10 Cryptocurrencies in Terms of Market Value in July

Source: Santiment Chart
Source: Santiment

Overall, the performance of the cryptocurrency market in July showed that the top ten currencies had a huge reversal around July 20, with a “V” trend again. The cryptocurrency market continued to fall until July 20. And after this day, it began to rebound and surge.

2. Spot Trading Volume on the Centralized Exchange in July

The Block Chart
Source: The Block

Spot trade volumes for cryptocurrency exchanges with fiat support. Includes largest exchanges with trustworthy reporting of exchange volume metrics.

The spot trading volume of centralized cryptocurrency exchanges in July was $25.9 billion, a decrease of 26.9% compared with June. The decline in the overall market in mid-July made investors lose enthusiasm for trading.

3. Bitcoin and Ethereum’s Volume of Futures in July

The Block Chart 2021
Source: The Block
ETH Block Chart
Source: The Block

The futures trading volume of Bitcoin in July in the first three weeks of trading volume was generally relatively depressed. Bitcoin futures trading volume in the last week of the month with the market began to rise sharply, the whole week trading volume reached $474 billion, which was the highest in nearly a month. The stimulus effect of price recovery on market activity is obvious.

The futures trading volume of Ethereum rose simultaneously at the end of the month. The figure also hit a near one-month high, rising further to $184 billion from $147 billion in the week. But Ethereum’s market activity is clearly not picking up as fast as Bitcoin’s.

4. Bitcoin and Ethereum’s Volume of Options in July

ETH Volume
Source: The Block
ETH Options
Source: The Block

In July, the trading volume of Bitcoin and Ethereum options also rose sharply in the last week. On the one hand, the expiration of monthly contracts contributed to this short-term rise inactivity to a certain extent. On the other hand, the strong market has brought more attention to options products that are easier to increase capital utilization.

5. Bitcoin and Ethereum’s MVRV in July

Bitcoin and Ethereum's MVRV in July
Source: Glassnode

Market Value – The value of the exchange price and the amount of coin in circulation, the market value of the market.

Realized Value – This calculates the total value of the coin in circulation based on the market price at which the last single UTXO transaction is moved.

MVRV- MV/RV – when the value is low, this generally indicates that the market participants make little or no profit, and the higher MVRV value generally indicates that the asset holder is profitable.

In general, a value below 1.5 for BTC means a lower valuation and a higher valuation for a greater value than 3.5. 

The MVRV values for this month’s BTC and ETH reached a monthly low of 1.61 on the 21st, reflecting the BTC’s price reaching a better buying point. The MVRVs of BTC and ETH then rose in a straight line, returning above 2.0 on August 1.

6. DeFi’s Gross Value Locked and Net Value Locked

DeFi's Gross Value Locked and Net Value Locked
Source: The Block

Value Locked is an indicator to evaluate the adoption scale of a DeFi project by calculating the total value (USD) of all ETH and other ERC-20 tokens locked in the corresponding smart contracts. Net Value Locked excludes assets that are double-counted in multiple protocols.

In July, DeFi’s Value locked eventually returned to $52.16 billion.

7. Decentralization Exchange Volume in July

Decentralization Exchange Volume in July
Source: The Block

In July, the transaction volume of decentralized exchanges reached 56.24 billion U.S. dollars. Compared with June’s 80.85 billion U.S. dollars, there was another monthly decline.

Among them, 65% of July’s transaction volume came from Uniswap v2 ($10.6 billion)and v3($26.32 billion). SushiSwap and Curve’s July transaction volume was $6.07 billion and $5.13 billion.

8. Weekly Trade Volume of NFTs in July

Weekly Trade Volume of NFTs in July
Source: The Block

NFT’s weekly trading volume surged to $339 million in the last week of July, up more than 70% from mid-July, when NFT’s weekly trading volume peaked at $209.27 million. Prior to that, the high point in weekly trading volume was $197 million reported in February. CryptoPunks accounted for a large portion of the latest weekly NFT transactions, with $207 million, Axie Infinity revenue of $127 million, and NBA Top Shot revenue of approximately $4 million.

9.Bitcoin’s Miner Total Miner Revenue in July

Bitcoin's Miner Total Miner Revenue in July
Source: The Block

Bitcoin miners’ revenue totalled $971.83 million in July, up 15.8% from $839.09 million in June, but still below the all-time high of $1.75 billion in March. Transaction fee income was $27.59 million, or only 2.83%, and the vast majority was blocked incentive revenue.

10.Ethereum Miner Total Miner Revenue in July

Ethereum Miner Total Miner Revenue in July
Source: The Block

Ethereum miners’ revenue totalled $1.03 billion in July, down 12% from $1.17 billion in June and only 42% from a record peak of $2.46 billion in May. Of this total, $180 million was in transaction fees, $845 million in block revenue, and $760,000 in “maximum extractable value” (MEV) revenue.

Review of Events and Market Quotations in June’s Cryptocurrency Market

1.Binance is Under Global Supervision

On June 25, the Financial Services Agency of Japan issued a warning to Binance, saying that it provides encryption services without registration. On June 27, the Financial Conduct Authority (FCA) of the UK also issued a warning to Binance that Binance shall not carry out any financial business regulated by the FCA in the UK or provide loan services to individual customers.

Even in the Cayman Islands where it was registered, Binance was not immune. On July 1, the Cayman Islands Monetary Authority issued a document on its official website stating that Binance has not obtained a license to operate a cryptocurrency exchange. The authority is investigating whether Binance and related companies operate in or from the Cayman Islands. Activities within the scope of authority supervision.

On July 2, the Securities and Exchange Commission of Thailand initiated criminal proceedings against Binance and investigated suspected operations in the digital asset business without a license. On the same day, the Monetary Authority of Singapore also stated that it is reviewing the encryption service license application provided by Binance and will follow up the actions of other national regulatory agencies as appropriate. On July 16, the Hong Kong Securities Regulatory Commission issued the “Warning Statement on Unregulated Virtual Asset Platforms” stating that no entity under Binance Group has been licensed or registered to conduct “regulated activities” in Hong Kong.

However, cryptocurrency-related activities are legal in the above regions, but they must be registered locally to meet regulatory requirements. In response to global supervision, Binance has taken many measures to try to highlight the encirclement.

Reduce Leverage, Reduce Service

Binance’s first move is reflected in the reduction of leverage and restrictions on withdrawals. On July 27th, Binance claimed that from now on, new users will have a maximum leverage of not more than 20 times within 60 days of contract account opening. This is a further adjustment after Binance executed the contract on July 19, 2021, and newly opened the user leverage limit. At present, Binance has significantly reduced its leverage limit, reducing its leveraged position from a maximum of 125 times to 20 times.

On July 30, Binance announced plans to gradually reduce its futures and derivatives services in Europe starting from Germany, Italy and the Netherlands. With immediate effect, users in these countries cannot open new futures or derivatives accounts on Binance and have 90 days to close their open positions.

Tax Reporting Tools, Limit Withdrawals

On July 28, Binance launched the tax reporting tool API. The main purpose of the API is to help users track cryptocurrency transaction activities, so as to ensure that users from all countries can fulfil the tax reporting requirements required by regulatory agencies. Starting in August, Binance has also reduced the daily withdrawal limit from 2 bitcoins to 0.06 bitcoins.

In the face of a series of regulatory disturbances around the world, Binance CEO Changpeng Zhao also publicly stated that “clear regulations are essential for sustained growth”. In the future, Binance will expand its international compliance team, expand compliance partnerships, and expand operations and business locally. In order to comply with local regulations, it demonstrates its strong willingness to comply with regulations. On July 26, Changpeng Zhao disclosed to the public that he hopes to resign as CEO in the next two to five years and focus entirely on the development of the BNB and Binance smart chain ecosystem. He hopes that this CEO has a very strong regulatory background.

For the development of the cryptocurrency market, global regulation will accelerate the compliance of trading platforms, and the tightening of supervision by governments of various countries will correct the deviation of the digital asset market and guide the trading platform on the right track.

2.NFT Summer’s Coming: the Explosion of NFT and Axie Infinity

The outbreak of Axie Infinity brought the cryptocurrency market in July into the summer of “NFT”. In July, Axie Infinity’s protocol revenue was $196 million, and the peak daily active users exceeded 250,000. The market value of token AXS increased from $200 million to $2 billion during July. In addition, Axie Infinity’s single-day revenue has been constantly refreshed, breaking new highs. On July 28, the single-day revenue was $18.48 million, twice the glory of the super king.

In fact, collectable games such as CryptoKitties, CryptoPunks, and Ether Water Margin have made chain games suddenly become the focus in 2017. A crypto cat was sold at a sky-high price of one million, but the subsequent crash confirmed that it was full of bubbles and speculation. Attributes. In 2018, there was another wave of capital board games, with FOMO3D before and then with the popular gambling (gaming) games on public chains such as EOS and TRON. A large number of players have entered the market one after another, and the fun of “gambling” and the gimmick of “getting rich overnight” has made the money plate game grow wildly. With the bursting of the bubble in 2019, the chain game has entered a period of cooling off.

Abitchain founder Zhao Meijun has said, “blockchain with a combination of games, the first stage is a combination of coins and blockchain, and the second stage is a combination of game props and characters and blockchain, the third The first stage is the combination of the rules of the game and the blockchain.” These three stages also correspond to the three stages of the chain game development process. From the rough chain game model of “game currency on the chain” to game equipment and other data assets, the rights are confirmed through non-homogeneous tokens. This time, the popular NFT chain game has introduced the “Play To Earn” money-making mechanism, and moved the game’s output logic and key rules to the chain, and the chain game has continued to develop towards a mature direction.

The summer that can be called NFT in July is not only dependent on the explosion of Axie Infinity. Since the beginning of this year, the NFT field has received more than 1 billion US dollars in financing, involving infrastructure, trading platforms, games, sports, DeFi, and development teams. road.

Porsche Digital, the digital division of Porsche, has released an NFT containing a hand-drawn sketch of Peter Varga, Porsche’s head of exterior design, on the NFT distribution platform SuperRare. Coca-Cola and Tafi, a 3D virtual avatar application platform, have launched their first NFT collection “Coca-Cola Friendship Box.” In order to celebrate the 200th birthday of the founder, Mr Louis Vuitton, LV specially launched the “Louis the game” NFT game. From sports to consumer products to automobiles, the concept of NFT is accepted and used by more and more traditional industries, and Internet giants are also focusing on this field.

AntChain, a subsidiary of Alipay, is a pioneer in the field of NFT by domestic Internet companies. Based on AntChain, it not only launched the payment code skin “NFT”, but also produced related NFT collections for this European Cup. Subsequently, Tencent also began to test the NFT trading platform. Tencent Music’s first limited edition “TME Digital Collection” has been launched on QQ Music one after another. It comes from Tencent’s PCG business group and the “Phantom Core”, known as the first NFT trading platform in China, also officially launched its APP.

Instagram seems to be working on deploying NFT functions on its apps, as well as end-to-end encrypted chat functions. At that time, Instagram posts that provide NFTs will have a “Collectible” tag, which will show users that there are NFTs available for purchase in the post. Twitter also launched a free NFT free activity, giving out 140 newly designed NFTs for free, consisting of 7 different NFTs, and each NFT will have 20 versions.

3.Visa, Mastercard, Square, Payment Giants Accelerate The Deployment of Encrypted Payments

On July 8, payment giant Visa announced that in the first half of 2021, cryptocurrency-related Visa card consumption activities exceeded US$1 billion. Cuy Sheffield, head of Visa’s encryption department, also said on Twitter that Visa’s encryption department has hired a number of professionals and plans to further expand its encryption team.

On the following July 16, Square CEO Jack Dorsey stated on Twitter that Square would open a new business to develop Bitcoin hardware wallets that will allow customers to better store Bitcoin.

On July 28, the international payment giant Mastercard (Mastercard) launched a new “Start Path” plan, which aims to support the fast-growing and institutions that are safer and easier to buy, consume and hold encrypted currencies as well as digital assets.

PayPal has also begun recruiting cryptocurrency-related positions in Dublin, Ireland, and other places, mainly covering compliance and anti-money laundering. It plans to expand its cryptocurrency-focused business and help it enter the cryptocurrency market.

It is no accident that payment giants are accelerating their deployment in the cryptocurrency payment field. As of June this year, the number of global cryptocurrency users has reached 221 million. Among them, it took nine months to grow from 65 million users to 100 million users, and it took only four months to increase from 100 million users to 200 million users. The scale of the cryptocurrency market also broke through to 2 trillion yuan this year. Not only has cryptocurrency become an investment asset accepted by the market, but it will also be used as a payment option. According to a report released by the consulting company Industrial ARC, the global cryptocurrency payment ecosystem market is expected to reach 630 million U.S. dollars by 2025, and it will grow at a compound annual growth rate of 23.4% from 2020 to 2025. Factors such as the growth of the trading market and business flexibility will promote the rapid growth of the global cryptocurrency payment ecosystem market.

4.Ethereum’s London Hard Fork: August 5

On July 15th, the Ethereum Foundation issued the official announcement of The London Update. After announcing the successful deployment of the testnet, the London upgrade is fully ready to be activated on the Ethereum mainnet. It will be launched at block 12965000, and the expected time is August 5.

Previously, all three testnets of Ethereum have successfully activated the London upgrade. The Ethereum testnet Ropsten was first successfully activated, which was activated at block height 10499401 at 10:03 on June 24; followed by Goerli at block height 5062605 at 11:19 on July 1st; Rinkeby The London upgrade was activated at block height 8897988 at 1:27 a.m. on July 8. The testnet Kovan will be upgraded after the Ethereum mainnet.

This upgrade is undoubtedly the most concerning in the history of Ethereum, and it may also be the most important upgrade. Until August 4th, discussions on the London upgrade were still in full swing throughout the network, and 35% of the nodes were still not upgraded to support the London hard fork.

5.Huge Reversal of Crypto Currencies Market: The continue of “V” Trend 

The overall market for cryptocurrencies showed a huge contrast around July 20th. Bitcoin has bottomed out before, falling below 30,000 to 28,000 at one point. But just when the market believed that the subsequent rally was a normal overshoot rebound, Bitcoin’s prices rebounded strongly, by more than 5% on July 21st. The price of Bitcoin climbed for the next five days, rising to 35,000 on July 25th. In fact, on July 26, the price jumped even more with a maximum gain of 12.49%. The market showed a bullish trend, with Bitcoin testing the $40,000 resistance level for the first time. In the following days, it constantly tested around 40,000, and successfully exceeded $42,000 on July 31st. On July 21st and July 26th, this time the market showed two key nodes of “V” reversal.

7/21: The Bitcoin World Stop The Falling

On July 21st, the Bitcoin World invited Twitter founder Jack Dorsey, ARK founder Cathy Wood and Tesla CEO Elon Musk, who led the multi-bitcoin campaign. Musk said that SpaceX and he himself held Bitcoins, Ethereum and dogecoins, but, bitcoins were worth much more than Ethereum and dog coins. Musk also mentioned that Tesla, SpaceX and others would not sell bitcoin while adding that if clean energy issues improved, Tesla may resume accepting BTC. 

Since its inception, Kathy Wood has been focusing on Bitcoin and was investing in GBTC from as far back as 2015, with Ark’s investment topics including genetic technology, robotics, artificial intelligence, energy storage and blockchain technology. Ark currently holds a large number of Bitcoin (GBTC) and Coinbase stock positions.

Undoubtedly, the Bitcoin World has injected confidence into the falling bitcoin and cryptocurrency markets, which have reacted to the news with a normal overshoot rally. CEO of social giant Twitter, Jack Dorsey also publicly announced on July 23rd that BTC would be an “important part” of the company’s future, and he plans to integrate BTC into Twitter’s special attention, subscriptions paid tweets and more. Square, the mobile payment company founded by Dorsey, has been involved in Bitcoin payment solutions since 2014.

7/26: Fake news: Amazon may Accept Bitcoin Payments this year

On July 26th, an anonymous source inside Amazon told CityAM that the company planned to accept bitcoin payments by the end of 2021. Amazon’s previously announced hiring of digital currency and blockchain product owners also seems to support the news, with Amazon’s recruitment of digital currency and blockchain product owners to be part of Payments Acceptance and Experience. 

According to a February survey of 1,000 U.S. consumers by Dealaid.org, 60.2% want more companies to accept BTC payments, with Amazon, Apple and Wal-Mart the companies consumers most likely to receive BTC payments. So if Amazon does accept BTC shopping, the benefits could be stronger than Tesla.

Although an Amazon spokesman denied the reports on July 27, it responded in an email:

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon.”

But Amazon’s news still weighed heavily on the market on July 26, with the BTC’s price peaking at $39,799 that morning, up by 12.49%. It must be noted that this is the biggest intraday gain since May, and ETH’s price rising 9.18% from $2,189 to $2,390. Other mainstream cryptocurrencies are up about 10%.

True Reaction False News, Investors Still not far away

Amazon’s refuting the rumours did not destroy the cryptocurrency market detonated by fake news. We believe that the explosion of the NFT sector has provided fuel for this strong rebound in the cryptocurrency market. The summer of NFT has arrived, and the concepts of GameFi and SocialFi have given investors who have left the market or emptied themselves to see the hope of a recovery in the bull market.

On the other hand, investors in the cryptocurrency market are strongly bullish on Ethereum. Ethereum holders are actively transferring their tokens from centralized exchanges. The number of ETH in centralized exchanges is declining, and the total amount is less than 15.5 million, which is a record low. At the same time, the number of ETH in smart contracts exceeded 30 million, accounting for 25.9% of the circulating supply. This sign indicates that the willingness of holders to sell is weakening. Investors believe that the gas fee adjustment and deflationary effect after the upgrade of Ethereum London will inject vitality into the Ethereum ecosystem.

From the macro environment, the rebound of the cryptocurrency market seems to be inseparable from the collapse of global stock markets in the last week of July. Due to factors such as the delta epidemic, the friction between China and the United States, and policy risks, the global stock market has reappeared “Black Monday”, the cryptocurrency market has once again become a safe haven for investors’ funds.