Deepdive into the crypto markets - February 2021
February continued at the same tune as January with a strong feeling of a “bull market” being around the corner. At the center stood Elon Musk, who first got the whole market to jump when he added the hashtag #bitcoin to his Twitter profile and later, even more, when Tesla bought 1.5 million USD worth of bitcoin.
Tesla managed to get bitcoin to surpass 1 trillion USD in market capitalization and the company has at time of writing made 1 billion USD in revenue on the trade.
The crypto market
The crypto market follows bitcoin quite closely, and we see that the market during the last 365 days has continued to climb. “Number go up” or “NgU technology” as we often say in bitcoin is still by far our strongest marketing tool.
Bitcoin and the traditional industry
Also on the list of companies and assets as a comparison we see bitcoin climbing. We just passed Tencent and are closing in on Google. The end goal is gold. To pass gold in market cap bitcoin needs to increase about 10x or 1000%. At that point it will be hard to debate if bitcoin is the new digital gold or not.
Bitcoin and other cryptocurrencies
Bitcoins market cap compared to other digital assets continues to hover around 60%. During the most recent bull run in 2017 we saw that after bitcoin peaked its market cap against altcoins like ether plummeted since they made a similar but delayed price movement as bitcoin.
For those who use Ethereum to get access or experience the decentralised financial system or “DeFi” one important component is Oracles. Oracles are what makes it possible for the blockchain to read data from the real world like stock prices or weather conditions. Here follows a short video that explains it further.
This month most impactful news
Tesla has made about $1 billion in profit on its bitcoin investment, analyst estimates Bitcoin steams to new record, hits $1 trillion market cap
Other interesting data
Bitcoin network is popular, and it continues to grow. We see for example how the price of a bitcoin measured in Swedish Krona has increased a lot, but not everything in the bitcoin network is as flexible as the price. Below you see the average number of transactions that are processed in a block in the blockchain. Even though the demand for the asset, and transactions on the network is spiking, the number of transactions stays about the same. And what happens when demand grows but supply does not?
Precisely. The price of a transaction jumps instead. Below you see the average price you have to pay to get your transaction into the bitcoin blockchain. If more people want bitcoin. More people want to transact on bitcoin. And thus the price of an average transaction increases.