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Monday, May 18, 2020

Crypto and COVID-19

Crypto and COVID-19

  1. Bonds and ETH are outperforming BTC in 2020.
    • Crypto continued to rebound from its mid-March lows and at end of April Bitcoin was up 22% for 2020.
    • Bitcoin has also outperformed other assets that have generated a positive return for 2020 (eg Gold +6%), but is underperforming long-dated US Treasuries (eg TLT ETF + 23%) and a few cryptoassets like ETH.

  2. Will Ethereum (ETH) continue to outperform Bitcoin?
    • Price of ETH has outperformed BTC both in April (57%) and YTD (64%).
    • Ethereum (ETH) has shown positive fundamentals in 2020 with rising ERC-20-based stablecoin use and progress towards Ethereum 2.0 rollout.

  3. What is going on with the stock market, and what does it mean for crypto?
    • US GDP shrank by nearly 5% in Q1 and over 30 million Americans have now filed unemployment claims in the last six weeks, but the S&P 500 index gained 13% on the month and is now only down 10% year-to-date.
    • Amidst this economic environment, more and more evidence indicates that institutional and retail investors are looking to both Gold and Bitcoin as an alternative to buying stocks at present valuations.

  4. Pre-halving hash rate has rebounded to near all-time highs.
    • Leading up to Monday’s halving we looked into previous halving cycles. The hash rate has confirmed the rebound we announced in April, and is back to high levels of 2020.
    • Confirmed transactions have slowly increased throughout the month of April; we dive into what it really means and look back at the recent drop in March.
    • As the Bitcoin network became congested toward the end of April, we explain how mempool size and fees per transaction are related.

For full report see here


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