22 Feb 2021

Market Recap

Another week, another new high. Bitcoin broke through previous $50k resistance to print $58k and reaching historic milestone of US$ 1tn market capitalisation. Initial push above $50k was driven by news of MicroStrategy raising additional US$ $1.05bn in convertible notes to acquire additional BTC. Currently, MicroStrategy has 71,079 BTC, accumulated at average cost of $16,109 (marked-to-market gain of US$ 2.9bn). However, it is also worth noting that large investors (those with wallets holding 1k+ bitcoins) have trimmed their positions (Chart 1), suggesting the move higher was driven by retail;

Chart 1: Change in Bitcoin Holding of Large Investors by Length of Holding, from Source: Chainalysis

this is also in line with increase in visits to crypto exchanges followed by Musk’s twit (Chart 2).

Chart 2: Daily Visits to Crypto Websites

Bitcoin that has passed through exchanges has made a realised gain of $78bn between entering and exiting, with 54% of these gains made in the last 15 weeks (Chart 3), representing large amounts of profit that are being captured by crypto investors/traders.

Chart 3: Realised Gain between Entering and Exiting an Exchange, from Source: Chainalysis

Institutional space is also seeing increasing number of traditional financial institutions looking to enter the crypto space. Counterpoint Global, investing arm of Morgan Stanley with $150bn in AUM, is currently performing assessment of Bitcoin and crypto assets; JPM anticipates they will begin offering Bitcoin to clients in the future; Deutsche Bank is preparing to build crypto asset custody and trading.

In the alts space, exchange tokens (BNB +125%, HT +108%, CRO + 64%, FTT +76%) massively outperformed rest of the market — rally was led by BNB, which was driven by popularity of Binance Smart Chain’s DeFi projects (CAKE +162%, XVS +79%, BAKE +480%).

On the macro side, yet another round of selling pressure left the 10 and 30-year Treasury yields at 1.34% and 2.13% respectively, each at or near a one-year high. Expectations of extra US$1.9trn coronavirus relief plan to be passed before end of February and strong retail sales data drove inflation worries, also reflected in copper prices reachinhg a fresh 9-year high above $4 a pound. The concern on long-term yields weighed down on tech stocks while pushing up financials, and major indices finished the week little changed. Treasury Secretary Yellen and Fed Chair Powell are little worried about inflation, and with increasing inflation, market volatility could head higher.

(Feb 22, 2021 Top 5 Crypto KPI)

What is Happening?

A survey by Gartner showed that only 5% of financial executives plan to invest and hold bitcoin as a corporate asset this year, despite the growing adaptation of Bitcoin. 84% of respondents cited financial risk due to volatility of bitcoin as the top concern.

PancakeSwap became the largest decentralized exchange (‘DEX’) by trading volume, overthrowing Uniswap. PancakeSwap is built on the Binance Smart Chain, which offers users significantly lower fees and faster than the Ethereum network; with this value proposition, BSC-based PancakeSwap and BurgerSwap have been snatching away trading volumes from ethereum-based Uniswap and Sushiswap. The growing popularity of DeFi platforms also saw surge of exploits in these platforms’ smart contracts, and going forward, we expect to see growing space in DeFi insurance and audit.


The crypto capital markets is still at its infancy stage. Volatility is to be expected. At the risk of sounding like a broken record, we continue to advocate adding to core long exposures on dips, with priority given to the top 5 largest market caps.

Good Luck!