There are three topics discussed in this article. First, we will discuss about Bitcoin. I guess many people here are concerned about how the price of the currency goes, so let’s talk about the general environment of Bitcoin. Secondly, we will share some interesting things about DeFi, and thirdly, we will discuss about the opportunities of the NFT.
One of the most important characteristics of Bitcoin is its antifragile. For example, since the epidemic last year, Bitcoin has achieved great trend and surpassed all assets, including the US stock index, silver, and gold, it is riding on all assets in the world. This means that when most of the old markets were still emerging markets, large institutions and large players had not yet fully entered the market. We can now see the world’s richest man buying and the Tesla using Bitcoin as an asset reserve. Bitcoin is a very good asset in the context of weak global liquidity.
Secondly, everyone cares about who is buying Bitcoin. The most important point is overseas investors, as they can buy Bitcoin with one click. The other is the Grayscale Bitcoin Fund, which is well-known in the industry. We can see that Grayscale manages 650,000 bitcoins from its emergence to the present, accounting for 3.5% of the entire bitcoin circulation. We see that more institutions are gradually increasing their holdings of Bitcoin, through different funds, methods, and entities. With that, the speed, quantity, and quality of the entire institution’s purchase of Bitcoin is increasing substantially in general. The main targets for increasing holdings are overseas investors and the overseas institutional investors. They buy bitcoins unlike retail investors. Tesla will not sell them, and Musk will not buy them on Twitter. The bitcoins produced every day are bought through large institutions and large companies who will not sell them. They are used as asset reserves, and they have many advantages as asset reserves. First, they can issue bonds, use as collateral, and refinance. Therefore, the utilization rate of capital is very high, which is a growth factor.
In addition to the spot market, another important point is derivatives, which are several times larger than the spot market.
Bitcoin has been through for 12 years. During the most recent halving, there were 312 before the halving. Then, the entire crypto industry was blood bathed. Despite the ups and downs for 12 years, it is still going strong. It ushered in a new high after each correction. Therefore, Bitcoin fully embodies the anti-fragility, and it can reach a better state than before through each evolution.
In the second part, I will tell you about DeFi, a programmable finance. As of April 7th, the third-party data of locked assets exceeded US$82.5 billion. It was US$15 billion when I presented it a year ago. It has increased by 7–8 times within 6 months. This is an amazing speed. The trading volume of Ethereum is 63 billion, the trading volume on the chain is huge. There are various collaterals on DeFi, stablecoins, synthetic assets, Bitcoin, and Ethereum. You can turn Bitcoin into WBTC or HBTC. In the past, Bitcoin used third-party lending to obtain interest or arbitrage. Now Bitcoin uses on-chain to guarantee the security of lending through contracts. The current interest rate is about 15%, which is an amazing speed. DeFi is so magical. In Q1, there are 458,000 independent daily active wallets in the entire blockchain industry.
The growth of stablecoins is very good. Why is the market rising so much? When it was issued, it was US$50 million, an increase of US$100 million. Recently, it was 1 billion. A U.S. stock-listed company unicorn is 1 billion U.S. dollars. This is a surprising growth, and the stablecoins that have not added other synthetic assets, such as algorithmic stablecoins, and mortgage stablecoins, etc.