Gold, BTC plunged, why did hedging tools fail?

Guide

The new crown pneumonia swept the world, and the market's risk aversion increased, but the prices of gold and BTC declined, and the risk aversion tools failed.

Summary

Feature: Hazard instruments fail. The price of gold plunged, falling by more than 3.7% in a single day; the price of BTC continued to fall, and the decline of the main circulation certificate expanded. The reason is that the current rise in the price of gold started early and was weak. The plunge in global stock markets is also an important reason for the gold diving. In addition, due to the relatively small size of the crypto asset market, its impact on traditional finance is limited; uncertainty is rising, and the BTC market is on the sidelines; whether BTC has a hedging nature remains to be seen.

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Quotes: Dive sharply, the callback will continue. The total market value of digital tokens this week was US $ 253.10 billion, a decrease of approximately 12.1%; the average daily turnover was US $ 101.95 billion, an increase of 54.8%; the average daily turnover rate was 58.7%, an increase of 1.0% from last week. BTC's current price is $ 8672.5, a weekly decline of 10.5%, and the average daily trading volume is $ 43.6 billion. The current price of ETH is US $ 226.76, a weekly decline of 14.6%, and the average daily trading volume is US $ 22.2 billion. The BTC balance of the exchange this week was 785,500, an increase of 6,370 from last week. The balance of exchange ETH was 14.0284 million, an increase of 198,000 from last week. In the BICS secondary industry, the market share of retail e-commerce has increased.

Output and popularity: The difficulty of BTC is reduced for the first time this year. BTC's mining difficulty this week was 15.48T, a decrease of 0.06T compared with last week; the average daily computing power was 111.94EH / s, which was an increase of 0.2EH / s from last week; ETH's mining difficulty this week was 2286.6, which was an increase of 49.6 from last week. ; The average daily computing power is 181.4TH / S, which is 2.6TH / S higher than last week.

Industry: The main circulation certificates go down collectively, and platform tokens emerge suddenly. Huobi will destroy 150 million HTs and will not issue additional HTs. The Huobi public chain test network will be officially launched, and HT will become its sole underlying token. The cryptocurrency exchange OKEx suffered multiple rounds of DDOS attacks. As a result, the second-quarter contract and long-term options originally scheduled to go online at 3 pm were forced to suspend trading. A new exchange-traded product (ETP) that tracks the reverse value of BTC-SBTC is now available for trading on Boerse Stuttgart, Germany's second largest stock exchange.

Risk warning: regulatory policy risks, market trend risks

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1Gold, BTC plunged, why did hedging tools fail?

At present, new crown pneumonia is raging around the world, and large-scale epidemics have occurred in Japan, South Korea and the United States. The market panic index has risen and the market's risk aversion has increased. However, the price of gold has plunged this week, and the price of BTC, also known as "digital gold," has continued to fall.

1.1 Both Gold and BTC Prices Decline

The price of gold plunged, falling by more than 3.7% in a single day. Although the market's risk aversion has continued to rise, as an important safe-haven asset, the price of gold this week has been fluctuating and falling, with a single-day drop of more than 3.7% on Friday, which is really rare.

At the same time, the BTC price continued to fall, and the decline of the main circulation certificate expanded. Previously, as a potential safe-haven asset, BTC, which often performed well in market panic, was uncharacteristically this week and continued to decline.

1.2 Stock market plummets, liquidity demand rises, gold risk aversion fails

The spread of new pneumonia globally has exacerbated market risk aversion and pessimistic expectations of the future economy. As an important hedge tool, gold has the characteristics of preserving and increasing value, and it is often favored by investors when the uncertainty of the macro environment rises. From this point of view, the price of gold should rise this time when the epidemic struck. However, this week, gold has seen a diving market for the following reasons:

First of all, the start of the gold price rise was earlier, and the succession was weak. Since the beginning of February, the price of gold has skyrocketed to $ 1640.59 per ounce on February 21, a record high since January 2013. After that, some investors cashed out of the market due to liquidity and security considerations.

Second, the global stock market crash is also an important reason for gold's decline. The WHO raised the global risk of the new crown pneumonia epidemic, the market panic soared, and global stock markets experienced a black week. The stock market has plummeted, and leveraged traders need to transfer funds to meet the stock market's margin requirements. Gold is used as a liquid asset in the stock market for trading, which has led to selling behavior in the gold market.

1.3 BTC Continues to Decline, Suspicion of Hedging Properties

With the increase in recognition and the development of the market, BTC has developed into a reliable and effective means of value storage, so it has been awarded the title of "digital gold" and has become a safe haven for some investors. However, with the outbreak of this epidemic, global assets have generally fallen, BTC has not shown its due hedging attributes, and prices continue to fall for the following reasons:

First, the size of the crypto asset market is relatively small and has limited impact on traditional finance. At present, the total market value of the entire crypto market is less than 250 billion US dollars, and the market value of BTC is only more than 160 billion US dollars. The size of the crypto market is too small to bear the hedging needs of traditional financial massive funds. Therefore, BTC is still only a hedging asset recognized by the crypto market. Although it has received the attention and blessing of some institutions, the proportion is very small. At the same time, crypto assets have not yet been included in the asset allocation pools of major global institutional investors, so their linkage with traditional capital markets is relatively small.

Second, uncertainty is rising, and the BTC market is in a wait-and-see state. The impact of the quarterly contract delivery approaching and halving the market is still unknown, making the current uncertainty of the BTC market rising, and most investors are on the sidelines. After BTC reached the $ 10,000 mark at the beginning of February, the market experienced a turbulent shock. The bulls and bears played a fierce game near $ 10,000, which aggravated the uncertainty of the market.

Finally, it remains to be seen whether BTC has a hedging nature. On the one hand, BTC did show a certain hedging value: BTC and gold both rose sharply in June 2019 due to trade wars and other reasons; in the US-Iraq crisis in early 2020, BTC and gold rose again. On the other hand, BTC's response to international events is uncertain, and it does not always work as a hedge. For example, in early February, when the epidemic swept the world, BTC was not sought after as gold, but prices continued to decline.

2 Quotes: Significant diving, the callback will continue

2.1 Overall market: The market value of digital tokens has shrunk sharply

The ChaiNext Digital Asset 100 Index closed at 811.80 points this week, down 11.9%. The ChaiNext Digital Asset 100X Index closed at 2279.10 points, down 15.1%.

The total market value of digital tokens this week was US $ 253.10 billion, a decrease of US $ 34.85 billion compared with last week, a decrease of approximately 12.1%. BTC recorded its largest weekly decline this year, and the unilateral price rise came to an end and entered a consolidation market.

The average daily turnover of the digital token market was 158.43 billion US dollars, down 5.7% from last week, and the average daily turnover rate was 58.7%, up 1.0% from last week.

The BTC balance of the exchange this week was 785,500, an increase of 6,370 from last week. The balance of exchange ETH was 14.0284 million, an increase of 198,000 from last week. The BTC and ETH balances of the exchanges have both increased, and the selling pressure in the market has increased.

The market value of USDT is USD 4.63 billion, a decrease of USD 28 million from last week, and the USDT relative to the USD premium rate has decreased. The USDT / RMB OTC price is 7.14, and the premium rate is close to 2%.

2.2 Core Tokens: The main circulation certificates fell

BTC's current price is $ 8672.5, with a weekly decline of 10.5% and a monthly decline of 6.9%. The average daily turnover is 43.6 billion US dollars, and the average daily turnover rate is 25.9%. BTC failed to break through the resistance at $ 10,500 this week, and chose to turn down.

The current price of ETH is $ 226.76, with a weekly decline of 14.6% and a monthly increase of 29.5%. The average daily turnover is US $ 22.2 billion, with an average daily turnover rate of 82.9%. ETH has performed strongly this month.

The current price of EOS is 3.51 US dollars, with a weekly decline of 13.8% and a monthly decline of 11.8%. The average daily turnover is $ 4.53 billion, with an average daily turnover rate of 126.2%. The EOS market is highly active, with large fluctuations and risks.

BCH's current price is $ 313.6, with a weekly decline of 17.3% and a monthly decline of 17.8%. The average daily turnover is 4.91 billion US dollars, and the average daily turnover rate is 78.0%. The concept of reduction in production tokens has fallen sharply.

The monthly volatility of the main tokens this week has further increased, and the price fluctuations have been sharp.

2.3 BICS Industry: Market share of retail e-commerce rises

Among the top five BICS (Blockchain Industry Classification Standard) secondary industries in terms of market value, the market share of retail e-commerce, stable tokens and other industries has increased significantly; performance optimization and the market share of media content have been significant decline.

The BICS secondary industries that saw a significant increase in the number of tokens this week were payment settlement and medical care. The obvious declines were operating platforms and information technology.

2.4 Market View: Uncertainty Rising

Uncertainty is rising and the market is on the sidelines. The impact of the quarterly contract delivery approaching and halving the market is still unknown, making the current uncertainty of the BTC market rising, and most investors are on the sidelines. After BTC reached the $ 10,000 mark at the beginning of February, the market experienced a turbulent shock. The bulls and bears played a fierce game near $ 10,000, which aggravated the uncertainty of the market.

Uncertain market direction, pay attention to controlling positions. The BTC halving market is approaching. The recent turbulent market has provided investors with a more suitable price. At present, it is still a good time to invest in digital assets such as BTC. Long-term currency holders can consider fixed investment or bargain hunting.

3 Output and popularity: BTC difficulty is reduced for the first time this year

The difficulty of BTC decreased slightly, and the computing power increased. BTC ’s mining difficulty this week was 15.48T, a decrease of 0.06T compared to last week; the average daily computing power this week was 111.94EH / s, an increase of 0.2EH / s compared to last week; ETH ’s mining difficulty this week was 2286.6, an increase of 49.6 compared to last week The average daily computing power is 181.4TH / S, which is 2.6TH / S higher than last week.

This week, Google Trends' search term for Bitcoin terms was 11, which was the same as last week, and the search term for Ethereum terms was 11, which was a decrease from last week.

4 industry news: the main circulation certificate goes down collectively, and platform tokens emerge suddenly

4.1 Huobi destroys 150 million HT and no longer issues

On February 29, Huobi officials announced that Huobi would destroy about 150 million HTs; the Huobi public chain test network was officially launched, and HT will become its sole underlying token. After destroying about 150 million, HT entered "absolute deflation" and the platform will no longer issue HT. After the announcement, HT rose to $ 5.48, surpassing last year's highest point.

4.2 OKEx suffers DDOS attack and is forced to suspend trading

On February 28, the crypto token exchange OKEx suffered multiple rounds of DDOS attacks, and the single peak traffic reached 400G. Affected by this, sub-quarter contracts and long-term options that were originally scheduled to go online at 3 pm were forced to suspend trading and temporarily upgrade the system. The estimated upgrade time is 40 minutes.

4.3 German Stock Exchange launches BTC ETP trading

A new exchange-traded product (ETP) that tracks the reverse value of BTC-SBTC is now available for trading on Boerse Stuttgart, Germany's second largest stock exchange. It is reported that the exchange is also the ninth largest exchange in Europe, with a turnover of 68.5 billion euros in 2019.

Notes:

For some reasons, some of the terms in this article are not very accurate, such as: tokens, digital tokens, digital currency, currency, tokens, crowdsale, etc. If you have any questions, you can call the letter and discuss together.

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