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CoinDesk Quarterly Review

First Quarter 2020

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INTRODUCTIONBeyond ‘digital gold’ ....................................................................................................................................................................................3

MARCH 12 CRASHMacro rout: equities, gold, bitcoin and oil all decline .............................................................................................................. 5

Bitcoin price plummets ............................................................................................................................................................................ 6

Bitcoin volume spikes ................................................................................................................................................................................7

Ethereum’s largest daily drop in history .......................................................................................................................................... 8

A sudden price drop triggered snowballing liquidations ...................................................................................................... 9

March 12 moves, top crypto assets ...................................................................................................................................................10

MARKETS’ NEW NORMALFutures markets shrink ............................................................................................................................................................................ 12Futures markets stay active ..................................................................................................................................................................13Bitcoin whale population remained stable ...................................................................................................................................14Bitcoin’s long-term holdings unmoved on March 12 ..............................................................................................................15Bitcoin: Volatility leaps, along with everything else ................................................................................................................16

POST BULL-MARKET NARRATIVESBitcoin in the post-crisis world ...........................................................................................................................................................18Bitcoin ❤️ S&P ............................................................................................................................................................................................19Bitcoin: can payments make a comeback? .................................................................................................................................20Bitcoin: can payments make a comeback? ..................................................................................................................................21Ethereum: DeFi takes a hit ....................................................................................................................................................................22Ethereum: How March 12 impacted a DeFi leader ...................................................................................................................23Ethereum: Adding ‘centralized’ components ..............................................................................................................................24Ethereum: ‘Application’ narrative holds strong ..........................................................................................................................25Halving look-ahead ...................................................................................................................................................................................26

TECHNICAL ROADMAP UPDATEEthereum ........................................................................................................................................................................................................28Bitcoin ..............................................................................................................................................................................................................29

RETURNS & VOLATILITYBCH, BSV and ETH outperform BTC ..................................................................................................................................................31When bottom? .............................................................................................................................................................................................32Volatility increases across the board ..............................................................................................................................................33

Contents

Contents

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Bitcoin’s “digital gold” narrative grew up in a “bull market in everything.” Bitcoin as gold 2.0, a hedge against inflation and a safe haven in an eventual crash, was a meme that investors readily understood. Now we’ve seen an economic crisis cause dislocation in crypto markets and push bitcoin’s price downward in tandem with stocks. Gold and Treasury bonds appeared to have failed to live up to “safe haven” expectations. If gold’s narrative is being debated, do we still know what “digital gold” means? At the very least, the events of the past month have put to rest the notion that bitcoin today can be a “haven.” The flagship crypto asset’s next meme will set the adoption curve for verifiably scarce digital assets. Will payments re-emerge as an avenue to adoption? Or, will Bitcoin developers add capabilities—like Schnorr signatures, with their privacy and

programmability—that will lead to its adoption as digital financial infrastructure? Similarly, Ethereum finds itself at a crossroads. Ether evangelists have spread the meme, “ETH is money,” pointing to its potential as the base currency of a decentralized, digital banking system, dubbed “DeFi,” for “decentralized finance.” Network congestion and the resultant failure of flagship DeFi systems like MakerDAO during the March 12 crash have raised questions about that narrative. Now, more than ever, it seems to be dependent on a relatively uncertain road map for “ETH 2.0,” an improvement designed to allow more transaction throughput. This report lays out an overview of what happened to crypto assets in Q1 2020 and begins to examine what will emerge, now that the digital gold story has been shaken.

Beyond ‘digital gold’

Introduction

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March 12 crash A blow-by-blow account of crypto and macro action in derivatives and spot markets.

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Returns since S&P 500’s peak on February 19, 2020

BTC

Gold

S&P500

Oil

−70%

−60%

−50%

−40%

−30%

−20%

−10%

0%

10%

Feb 16 23 Mar 1 8 15 22 29

Returns (%)

Global disruption caused by the spread of COVID-19 sparked a downturn across asset classes, including a 30%+ pullback in the equities markets. Bitcoin was not spared from the carnage, plummeting 40% on March 12 alone.

Macro rout: equities, gold, bitcoin and oil all decline

Source: TradingView, Bitstamp

March 12 crash

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$5,500

$6,000

$6,500

$7,000

$7,500

$8,000

12 AM 2:00 4:00 6:00 8:00 10:00 12 PM 2:00 4:00 6:00

BTC Price on Coinbase (USD)

Bitcoin price on Coinbase (USD), March 12, 2020Over the course of 12 hours on March 12, bitcoin lost over one-third of its market value. Prices started to stabilize during the second half of the day but did not show signs of recovery until March 18, when the price climbed back above $6,000. March 12 marked the third largest daily price drop in bitcoin’s history.

Bitcoin price plummets

March 12 crash

Source: Nomics, time in UTC

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Total bitcoin trade volume (USD Billion)

$0

$10

$20

$30

$40

$50

$60

$70

$80

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan ’20 Feb Mar Apr

Total BTC Trade Volume (USD Billion)

Daily BTC dollar volume was the highest it had ever been since 2018, with over $78 billion worth of BTC traded in 24 hours across 255 different cryptocurrency exchanges. Volume fell back in the following weeks and now sits about where it was before March 12.

Bitcoin volume spikes

Source: Nomics

March 12 crash

March 12, 2020

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Largest daily price drops in ETH historyEther (ETH) is the second largest cryptocurrency by market cap, valued at about $15 billion at this writing. On March 12, ETH experienced its greatest daily price drop in history. Similar to how bitcoin’s narrative as a safe haven asset weakened, ether’s narrative as a store of value for decentralized lending and investing was diluted after its near 45 percent drop in value.

March 12, 2020June 18, 2016March 18, 2017June 17, 2016August 2, 2016

-24.08% -25.44%-26.94% -27.14%

-43.20%% Di�erence in Price (USD)

Ether’s largest daily drop in history

Source: Coin Metrics

March 12 crash

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$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Jun Jul Aug Sep Oct Nov Dec Jan ‘20 Feb Mar Apr

Liquidations (USD Million)

Sell Liquidations

Buy Liquidations

BitMEX BTC-USD liquidations vs time

The BitMEX BTC-USD perpetual swap, one of bitcoin’s largest derivatives products, saw $876 million worth of trader positions liquidated on March 12. More than $700 million of that came in the span of 15 minutes, as bitcoin dropped from $7,200 to $5,678. The next day was another bloodbath, with $798 million liquidated in bitcoin perpetual swaps. Sell pressure from BitMEX’s liquidation engine was blamed for pushing the price down further, until a denial-of-service attack temporarily stopped trading on BitMEX.

A sudden price drop triggered snowballing liquidations

March 12 crash

Source: skew, data through March 30

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XTZBCHBNBETHEOSADAXMRBTCLTCXRP

-32%

-37%-39%

-41% -41% -42%-44% -44% -45%

-48%

XTZBCHBNBETHEOSADAXMRBTCLTCXRP

-32%

-37%-39%

-41% -41% -42%-44% -44% -45%

-48%

March 12 moves, top crypto assets

Performance of top 10 crypto assets, March 12, 2020

March 12 crash

Source: Paradigm API

All major crypto assets experienced significant pullback.• Of the Top 10 crypto assets* measured by market cap, XTZ and BCH were the

biggest losers, falling 48% and 45% respectively.• The drops for XRP and LTC were not as pronounced; they fell by 32% and 37%

respectively.

*excludes stablecoins and cryptocurrencies with less than $5 million in verified daily trade volume

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Markets’ new normal

The March 12 dislocation dealt a setback to speculative markets, but long-term holders seem unperturbed.

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$0

$1

$2

$3

$4

$5

$6

Sep Oct Nov Dec Jan ‘20 Feb Mar Apr

Aggregated Open Interest (USD Billion)

Bitcoin futures aggregated open interest ($) vs timeOpen interest in bitcoin futures and perpetual swaps fell off a cliff in March. These markets are used by traders large and small to speculate on bitcoin’s price and as a temporary hedge against positions in the spot market. After $1.6 billion of those traders’ positions were liquidated over two days in March, how long will it be until these pools of liquidity for short-term speculators can recover?

Futures markets shrink

Markets’ new normal

Source: skew, data through March 30, 2020

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$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Jul Aug Sep Oct Nov Dec Jan ‘20 Feb Mar Apr

USD Billion

Total BTC Volume

30-day Average

Bitcoin futures aggregate daily dollar volume (USD Billion)Bitcoin futures may be a smaller pool, but activity has not diminished. Volume in these markets spiked on March 12 and has settled back to a baseline equal to or above previous levels.

Futures markets stay active

Markets’ new normal

Source: skew, data through March 30, 2020

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0

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2,100

2,120

2,140

2,160

2,180

2,200

5 12 19 26 2 9 16 23 1 8 15 22 29Jan Feb Mar

No. of Bitcoin Addresses >= 1,000 BTC

No. of Bitcoin Addresses >= 1,000 BTC

0

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2,100

2,120

2,140

2,160

2,180

2,200

5 12 19 26 2 9 16 23 1 8 15 22 29Jan Feb Mar

No. of Bitcoin Addresses >= 1,000 BTC

No. of Bitcoin Addresses >= 1,000 BTC

Bitcoin whales (1K or more BTC holdings) vs time

Bitcoin whales YTD

Bitcoin whale population remained stable

Markets’ new normal

Source: Coin Metrics, data through March 30, 2020

The number of Bitcoin addresses holding 1,000 BTC or more is a metric we have used to indicate large investors going long. It’s imperfect, as investors may use more than one address, and one address may serve many investors. However, two points seem salient: • Flattening of 2018-2019 growth

has coincided with an apparent ceiling on the bitcoin price around $10,000.

• The number of bitcoin whales did not diminish on March 12, indicating the sell-off was likely not concentrated among bitcoin’s largest long holders.

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< 1d1d to 7d

7d to 30d

30d to 90d

90d to 180d

180d to 1y

1y to 2y

2y to 3y

3y to 5y

> 5y

12/31/19 1/7/20 1/14 1/21 1/28 2/4 2/11 2/18 2/25 3/3 3/10 3/17 3/24

Bitcoin Units by Time Since Last Transaction (’Hodlwaves’)

March 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

< 1d

1d to 7d

7d to 30d

30d to 90d

90d to 180d

Bitcoin units by time since last transaction (‘hodlwaves’)

“Hodlwaves” use Bitcoin timestamps known as UTXOs to measure how long each bitcoin has been held. Tracking time between transactions is a useful measure of long-term “buy-and-hold” activity, consistent with bitcoin’s use case as “digital gold,” a putative store-of-value. Note that long-term holdings (180d or more) did not change perceptibly during the March 12 crash, while balances held between 90d and 180d shifted abruptly into the < 1 day band. This indicates either that bitcoin sellers were concentrated among 3- to 6-month holders, or that exchange balances, which shifted on these dates, are concentrated in that band.

Bitcoin’s long-term holdings unmoved on March 12

Markets’ new normal

Source: Coin Metrics, data through March 30, 2020

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30d historical volatility of daily returns, bitcoin and S&P 500, vs time

SPX

Bitcoin

Bitcoin average

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Jan ‘19 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan ‘20 Feb Mar Apr

30-Day Volatility (%)

On March 12, historical volatility of the S&P 500 leapt into bitcoin territory–while bitcoin volatility approached highs set in Q4 2017. Stocks are now half as volatile as the blue-chip crypto asset; before, their volatility was less than one third that of bitcoin. If stocks’ volatility remains elevated, crypto assets may seem less volatile, by comparison.

Bitcoin: Volatility leaps, along with everything else

Source: CoinDesk BPI, St. Louis Fed, data as of March 26, 2020

Markets’ new normal

March 12, 2020

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Post bull-market narratives

From 2010 to 2020, crypto assets grew up amid a “bull market in everything.” The world has changed. There are early signs of a shift in investor expectations for crypto assets and in the narratives that drive adoption.

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Governments around the world are getting ready to fight the sharp drop in economic activity from COVID-19-related shutdowns by printing unprecedented amounts of money. Some, including the United States, are also planning to directly subsidize citizens and companies hit by the loss of income. This, combined with the build-up of inflationary pressures resulting from the unwinding of globalization that had begun even before the pandemic hit, is likely to eventually seep through to prices. The re-emergence of inflation after decades of price stability is not only likely to continue to add to stock and bond market volatility; it will also focus investor attention on assets that are resistant to inflation, such as gold and bitcoin. The confluence of Bitcoin’s halving (in which the rate at which new bitcoins enter circulation is cut by 50%) will further focus attention on the cryptocurrency’s pre-programmed mechanism, at a time when the underpinnings of fiat currencies are laid bare.

Bitcoin in the post-crisis world

Annual inflation of consumer prices in the U.S. (% change)

Annual US Consumer Inflation (%)

0%

2%

4%

6%

8%

10%

12%

14%

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020-2%

US RecessionSource: St. Louis Fed

Post bull-market narratives

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Bitcoin and S&P 500, 90d correlation of daily returns

90-Day Correlation of Daily Returns

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

Sep Oct Nov Dec Jan ‘20 Feb Mar Apr

It may be understood that “in a crisis, all correlations go to one,” but those who had placed faith in bitcoin as an “uncorrelated asset” were likely disappointed by how swiftly it changed from uncorrelated to correlated in March, 2020. Bitcoin may return to a state of non-correlation, but its narrative as an uncorrelated portfolio component has been punctured.

Bitcoin ❤️ S&P

Source: St. Louis Fed, CoinDesk BPI

Post bull-market narratives

March 12, 2020

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0

1,000

2,000

3,000

4,000

5,000

6,000

Jan ‘18 Apr Jul Oct Jan ‘19 Apr Jul Oct Jan ‘20 Apr

No. of Lightning Nodes (with Channels)

Number of Lightning nodes with open payment channels vs timeBitcoin’s creator or creators originally described Bitcoin as “an electronic payment system.” That narrative has been overtaken by “digital gold.” Yet, it remains strong. Since launch, the number of computers running Lightning Network, a “layer two” payments system built on top of Bitcoin, has increased on average 53 percent every quarter. The value held within Lightning payment channels has also increased.

Bitcoin: can payments make a comeback?

Post bull-market narratives

Source: Bitcoin Visuals

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0%

0.02%

0.04%

0.06%

0.08%

0.10%

0.12%

0.14%

0.16%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bitcoin Transaction Fees, Weekly Average (%)

Bitcoin: can payments make a comeback?Bitcoin’s transaction fees remained minuscule in the Q1 market turmoil, with weekly average hitting a YTD high of 0.016%. Its low transaction fees bolster its potential use as a payments and transfer system, especially for sending large amounts. It’s also positive for “digital gold,” in that sending bitcoin is indeed cheaper than sending gold.

Bitcoin transaction fees, weekly average

Post bull-market narrativesSource: Coin Metrics, data through March 29, 2020

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2,400,000

2,500,000

2,600,000

2,700,000

2,800,000

2,900,000

3,000,000

3,100,000

3,200,000

3,300,000

$0

$50

$100

$150

$200

$250

$300

5 12 19 26 2 9 16 23 1 8 15 22 29Jan Feb Mar

ETH Locked in DeFi, Q1 2020 ETH Price (USD)

ETH Locked in DeFi

Price

ETH locked in DeFi and ETH price vs timeOn March 12, when the ETH price dropped nearly 45 percent, total ETH locked in decentralized finance (DeFi) applications increased, as expected, then crashed amid a crisis in DeFi’s programmatic governance (see following slides). In the long-term, if the “ETH is money” narrative drives adoption, we’d expect to see the amount locked in DeFi and the ETH price grow in tandem. For the near-term, a recovery to previous levels would indicate a restoration of confidence in DeFi systems.

Ethereum: DeFi takes a hit

Post bull-market narratives

Source: Alethio and Coin Metrics

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XTZBCHBNBETHEOSADAXMRBTCLTCXRP

-32%

-37%-39%

-41% -41% -42%-44% -44% -45%

-48%

ETH is the primary collateral asset on decentralized lending platform MakerDAO. Due to the sudden price decline of ETH, a high number of loans on MakerDAO became undercollateralized and were automatically liquidated by the MakerDAO system. According to data from DuneAnalytics, over $10 million worth of $DAI loans were liquidated on March 12. Auctions selling loan collateral allowed some liquidators to scoop up collateral for $0. This caused an imbalance of debt to supply ratio in the MakerDAO system.

Ethereum: How March 12 impacted a DeFi leader

MakerDAO collateral liquidations & ETH price vs time

Post bull-market narratives

Source: Matteo Leibowitz via DuneAnalytics

0

$2

$4

$6

$8

$10

$12

$100

150

$200

$250

3/29/203/28/203/26/203/25/203/24/203/23/203/22/203/21/203/20/203/18/203/17/203/16/203/15/203/14/203/13/203/12/203/11/203/9/203/8/203/7/20

Liquidations (USD Million) ETH Price (USD)

Price

Liquidations

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USDC-Backed DAI Supply (Million) DAI Price (USD)

0

1

2

3

4

5

6

7

8

$1.010

$1.015

$1.020

$1.025

$1.030

$1.035

March 17 18 19 20 21 22 23 24 25 26 27 28 29 30

USDC DAI Supply

DAI Price

Amount of USDC-backed DAI and DAI price over time

In efforts to bolster demand and liquidity for DAI loans on MakerDAO, MKR token holders voted on March 17 to introduce a new collateral asset, fiat-backed stablecoin USDC. Unlike DAI, USDC is a centrally managed stablecoin where coin issuance is authorized by a group of companies (starting with Coinbase and Circle) as opposed to a decentralized codebase such as MakerDAO. This was a controversial decision, given that the introduction of USDC to MakerDAO would expose the decentralized system to a form of centralized risk.

Ethereum: Adding ‘centralized’ components

Post bull-market narratives

Source: Vishesh Choudhry via Etherscan and Makerdao Foundation, Coin Metrics

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Transaction Count (7-day Moving Average, ‘000)

Apr

Non-contract transactions

ERC20 transactions

ERC721 transactions0

50

100

150

200

250

300

350

400

5 12 19 26 2 9 16 23 1 8 15 22 29Jan Feb Mar

Ethereum: ‘Application’ narrative holds strongThough prices for ether have yet to rebound from March 12 losses, the cryptocurrency is still seeing high use by holders. In order for individuals to deploy decentralized applications on the Ethereum blockchain, ether is needed to fuel each application’s runtime similar to how one would fuel a car’s engine with gas. Looking at the number of transactions that have been deployed on the Ethereum blockchain that require ether to be used as a type of “gas,” it is clear that ether’s function as a utility grows more and more popular.

Token and non-token transaction counts on Ethereum

Post bull-market narrativesSource: Coin Metrics

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XTZBCHBNBETHEOSADAXMRBTCLTCXRP

-32%

-37%-39%

-41% -41% -42%-44% -44% -45%

-48%

In less than two months, Bitcoin’s block subsidy rewards will halve from 12.5 BTC to 6.25 BTC. Around the time of the previous two Bitcoin halvings, prices were increasing and off-setting the loss of block rewards to miners. The March price dip puts this halving into uncharted territory. Bitcoin’s store-of-value narrative is closely linked to mining and its programmed supply schedule. Mining activity is viewed as a fundamental. How will a bearish run-up to the halving impact Bitcoin mining and perceptions of the bitcoin asset? For more information on the Bitcoin halving event and its potential impacts, read our report here.

Halving look-ahead

Bitcoin price vs time and reference lines for halvings

Post bull-market narratives

11/ 28/11$2.54

11/ 28/13$1,007.39

Halving: 11/28/12

7/9/15$269.68

7/9/15$2,506.17

5/10/19$6,357.46

$0.01

$0.10

$1.00

$10.00

$100.00

$1,000.00

$10,000.00

$100,000.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

365 days before:+385%

365 days after:+8,069%

Halving: 7/9/16 Halving: 5/10/20 (expected)

365 days before:+142%

365 days after:+284%

As of March 21: -3%

BTC Price (USD)

Source: Coin Metrics, data through March 21, 2020

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Technical roadmap update

New functionality for crypto networks will dictate future user adoption narratives.

| 28Technical roadmap update

Proof-of-stake (Ethereum 2.0)Summary: Since as early as January 2014, developers have been researching methods to move the Ethereum network to a more scalable and energy-efficient system of transaction validation known as proof-of-stake (PoS), preventing the kind of network congestion that nearly brought down a leading decentralized finance network in March. PoS designs for Ethereum have moved from proof-of-concept to a complex and multi-staged plan for mainnet roll-out. Research is ongoing. However, developers have expressed confidence that the new system, colloquially dubbed “Ethereum 2.0,” will be ready for deployment this summer. After an initial roll-out, the highly anticipated upgrade is expected to take five to 10 years to become fully operational.

Timeline (tentative): July 2020

Ethereum

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Schnorr signaturesSummary: A new digital signature scheme to enhance the privacy and efficiency of transactions that require more than one party’s approval, known as multi-signature transactions. Schnorr signatures most notably enable public key aggregation, which allows multiple parties to share a single public identity or “key” on the network. This allows signers to remain anonymous and makes multi-signature transactions indistinguishable from regular transactions, a critical feature for businesses that don’t wish to broadcast processes and financial dealings. It is currently in the process of feedback and revision by Bitcoin core developers.

Timeline (tentative): Spring 2020

TaprootSummary: Building on Schnorr signatures, Taproot introduces privacy-enhancing features to Bitcoin’s scripting language. Bitcoin scripts are programmed to trigger transactions if certain conditions are met, a process also known as smart contracts. Today, the terms of these smart contracts are revealed on the blockchain when a transaction is triggered. Taproot would remove the need to reveal scripts in their entirety and make it so transactions initiated by smart contracts are indistinguishable from regular transactions. Like Schnorr signatures, Taproot is in the process of feedback and revision by Bitcoin core developers.

Timeline (tentative): Spring 2020

Bitcoin

Technical roadmap update

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Returns & volatility

The top-performing assets of Q1 2020.

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VeChain

NEO

EOS

TRON

Bitcoin

XRP

Cardano

BNB

Litecoin

Waves

Ethereum

Monero

Bitcoin Cash

Zcash

Ethereum Classic

Tezos

Chainlink

Metal

Dash 62.91%

38.97%

31.47%

30.03%

16.92%

14.89%

12.45%

5.17%

4.75%

4.56%

-0.54%

-3.25%

-6.48%

-7.20%

-7.77%

-9.55%

-9.88%

-19.69%

-38.93%

Performance of top crypto assets,* Q1 2020

Fourteen coins outperformed bitcoin in the first quarter of 2020. There were 19 crypto assets (excluding stablecoins and assets that launched intra-year) with over $5 million in verified daily trade volume (per Messari, whose “real” volume metrics is among the most conservative). Ten of these assets, including the second largest by market capitalization, ether, as well as bitcoin cash, saw positive returns in the first quarter of 2020.

BCH, BSV and ETH outperform BTC

Returns & volatility

Source: Messari

*Real 24-hour volume > USD $5 million, excluding stablecoins and assets that launched less than a year ago.

Data pulled on April 1, 2020 ~00:30 UTC from Messari Pro’s 90-day short-term ROI calculator.

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Bitcoin Market Value/Realized Value Ratio

3/12/20, 0.88

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Jan ‘17 Apr Jul Oct Jan ‘18 Apr Jul Oct Jan ‘19 Apr Jul Oct Jan ‘20 Apr

When bottom?Bitcoin’s ratio of market value to realized value (MVRV) reached below one in the March 12 crash. “Realized value” is based on the price of each bitcoin at the time of its most recent transaction; the ratio determines how much realizable gain is implied in the current price. MVRV has not yet hit its 3-year low of 0.69 and its all-time low of 0.39. Winter can get colder than this.

Bitcoin market value / realized value ratio vs time

Returns & volatilitySource: Coin Metrics

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btc

eth

xrp

bsv

bch

0%

50%

100%

150%

200%

250%

March 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Mar

30-Day Volatility (%)

30-day volatility of simple returns, top 5 crypto assets by market capitalization

BTC 30-day historical volatility of daily returns more than doubled after the March 12 price crash. Other large market cap cryptocurrencies also saw a spike in volatility on the same day thought not quite as high of a jump as bitcoin’s. Bitcoin’s volatility continued to rise incrementally in the following weeks after March 12. Among the top five cryptocurrencies by market cap, bitcoin has the second lowest 30-day historical volatility next to ripple (XRP).

Volatility increases across the board

Returns & volatility

Source: Coin Metrics

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Thank youCoinDesk Research is an investor-focused team of crypto data analysts, engineers and writers. Our aim is to build products, innovate metrics and create editorial content that serve all types of cryptocurrency investors. For more reports on the crypto investing landscape, visit coindesk.com/research. You can get in touch with us to learn more:

Email: research@coindesk.comTwitter: @coindeskdata

This report has been prepared by CoinDesk solely for informative purposes. It should not be taken as the basis for making investment decisions, nor for the formation of an investment strategy. It should not be construed as investment advice or as a recommendation to engage in investment transactions. The information contained in this report may include or incorporate by reference forward-looking statements, which would include any statements that are not statements of historical fact. No representations or warranties are made as to the accuracy of these forward-looking statements. Any data, charts or analysis herein should not be taken as an indication or guarantee of any future performance.

Information is based on sources considered to be reliable, but is not guaranteed to be accurate or complete. Any opinions or estimates expressed herein reflect a judgment made as of the date of publication and are subject to change without notice. Trading and investing in digital assets involves significant risks including price volatility and illiquidity and may not be suitable for all investors. The authors may hold positions in digital assets, and this should be seen as a disclosure of potential conflicts of interest. CoinDesk will not be liable whatsoever for any direct or consequential loss arising from the use of this information.