CoinDesk's first quarter 2020 report has been released. The time since the beginning of the year was not easy, the more interesting are the conclusions and forecasts made by analysts of one of the largest crypto resources.
Briefly, the conclusions about the state of the crypto market in the first quarter of 2020:
• Global disruption caused by the spread of COVID-19 caused a downturn across all asset classes, including a 30+% pullback in stock markets. Bitcoin was also in a knockdown, plummeting 40% on March 12.
• On March 12, ETH survived its biggest daily drop in history — nearly -45%.
• The sudden drop in prices triggered snowballing liquidations.
• All major crypto assets have experienced significant pullback (XTZ ~ 48%, BCH ~ 45%, XRP ~32%, LTC ~37%).
• BTC futures is not the biggest market, but the activity on it has not decreased. The volume in these markets rose sharply on March 12 and returned to the base level, equal to or above previous levels.
• The number of BTC whales (who have more than 1000BTC in their wallets) did not decrease on March 12, which indicates that the sell-off probably was not concentrated among the largest holders of long positions of the bitcoin.
• Correlation with S&P500. Those who believed in bitcoin as an "uncorrected asset" were probably disappointed with how quickly the situation changed in March 2020. Bitcoin may return to an uncorrelated state, but its positioning as an uncorrelated component of the portfolio has been questioned.
• Bitcoin transaction fees remained low during the market turmoil in the first quarter. Low transaction fees reinforce its potential use as a payment and transfer system, especially for sending large amounts.
• CoinDesk expects that the amount fixed in DeFi and the ETH price will rise in tandem. In the short term, restoring to previous levels will mean restoring confidence in DeFi systems.
• Halving will take place in less than two months when the reward for bitcoin block generation will be halved — from 12.5 BTC to 6.25 BTC. After two previous halvings, the price of bitcoin increased and compensated for the loss of bonuses for miners. The March drop in prices so far puts the upcoming halving on uncharted territory.
• New functionality for crypto networks will have a direct impact on adoption among users. First of all, it is the implementation of PoS for ETH, as well as Schnorr signatures and Taproot for BTC.