Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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The state of crypto – March 2023
Mads Eberhardt
Cryptocurrency Analyst
Summary: The balance of Ether on exchange has decreased, whereas it has stayed stable for Bitcoin, indicating an accumulation of Ether in February. It appears that the love of traditional investors for crypto faded in February, as exchange-traded crypto products experienced a slight outflow, compared to a significant inflow in January.
Immediately upon interacting with a blockchain, much data becomes publicly available on a public ledger. Analyzing this data may provide crypto traders and investors with helpful insight into the present state of the market. In “The state of crypto”, we take a look at the most important metrics to observe the market based on transaction and trading activity. Our main focus is the two largest cryptocurrencies Bitcoin and Ethereum, and we divide the metrics into short-term and long-term indicators. You find the report for the last month here.
Short-term
In February, the crypto market was subject to fairly low volatility compared to typical months, causing less on-chain data to stand out. Bitcoin’s price ended the month sideways, whereas Ethereum increased by around 1.8% in February. The modest price increase in Ether coheres with the flow of Ether from exchanges to private wallets, as nearly 0.3% of the Ethereum supply left exchanges in February. This suggests that more Ether has changed hands from short-term to long-term holders, as the latter often keeps them in wallets, indicating an accumulation of Ether in February. The balance of Bitcoins on exchanges has not changed, although it is yet much lower than Ethereum.
Long-term
The circulating supply of Bitcoin and Ethereum for the past 5 years continues to decrease, potentially indicating that holders are in control of an ever-decreasing portion of the total supplies. In the past month, the average loss of Bitcoin holders has slightly worsened, whereas the opposite is true for Ethereum holders.
It appears that more traditional investors secured some profit in February, as exchange-traded crypto products were subject to a slight outflow, following a significant inflow in January. In February, Bitcoin and Ethereum experienced an outflow of $16.8mn and $1.6mn, respectively, compared to an inflow of $124.8mn to Bitcoin and $9.1mn to Ethereum in January.
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