Research: DeFi Helps Ethereum Drive Bitcoin Out of the Market

Kraken specialists presented a new market analysis, the results of which are rather interesting.

In August, the correlation of bitcoin with gold peaked. Simultaneously, the cryptocurrency showed an increase in volatility and a positive movement in the trading volume. These are the conclusions made by Kraken specialists as part of a regular market research.

BTC Gold Correlation Chart

The specialist also drew attention to the decrease in the level of dominance of bitcoin in the market. The researchers illustrated the choice of investors in favor of altcoins on a graph that reflects the shares of BTC and ETH. The popularity of the Ethereum blockchain can be attributed to the growing demand for DeFi protocols that run on it.

The dominance chart of ETH and BTC

At the same time, Kraken analysts noted that as of August 31, 2020, about 63% of all mined bitcoins were in the hands of users focused on long-term investments. This, according to experts, is evidenced by the absence of any transactions for at least a year with the indicated amount of BTC.

The graph of the growth of bitcoin users who prefer to store cryptocurrency in the long term


Another topic that analysts touched upon in their study was the level of income from investments in BTC. The specialists noted that in 2020 the indicator went into negative values only in three out of eight months. The average return for September was -7%.

In October, according to statistics, the indicator may drop to -11%. November – on the contrary, based on the experience of previous years, turned out to be the most profitable month for investing in bitcoin (on average). At the same time, according to median values, the most profitable month for investing in BTC is April.

Comparison of the level of return on investment in BTC with indicators of cryptocurrency volatility

The maximum losses of investors fell on March – it happened on that month, against the backdrop of Black Thursday and its consequences. Then the analysts recorded the highest level of volatility in 2020.

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