CoinGecko Q2 2020 Cryptocurrency Report

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CoinGecko Q2 2020 Cryptocurrency Report

Founders’ Note3Centralized Exchange Tokens- Top-5 Centralized Exchange Tokens5Part 3Part 1Market Landscape- Spot Markets Overview- Top-5 Crypto Returns- Top-30 Coins Dominance- Bitcoin Price vs. Trading VolumeBitcoin’s 3rd HalvingStablecoins- Top-5 Stablecoins Trading Volume- Top 5 Stablecoins Velocity- Bitcoin’s Price vs. USDT Circulating Supply1015Part 2Crypto Exchanges- Top-10 Exchanges Trading Volume- Top-5 Decentralized Exchanges- Top-20 Exchanges Web TrafficAnalysts:Bobby OngSze Jin20Kristian Kho25BTC Perpetual Swaps32Decentralized Finance (DeFi)- DeFi Ecosystem- Top-10 DeFi Tokens- DeFi Newcomers38DeFi Highlights- Yield Farming- Liquidity Mining46CoinGecko Highlights- CoinGecko Trust Score Improved- Stablecoins and Discover Page- CoinGecko Candy50Crystaline LooShu WeiErina AzmiCoinGecko Q2 2020 Cryptocurrency Report2

Q2 2020 saw the recovery of crypto markets after a rough Q1 where the world felt theimpact of the COVID-19 pandemic. Total cryptocurrencies market capitalization increased by44.5% in Q2. The Bitcoin market took only 48 days to recover after falling by 35% within 24hours during March’s Black Thursday.Q2 saw the huge growth of the Decentralized Finance (DeFi) movement. We at CoinGeckohave been actively involved in DeFi ever since we published our How to DeFi book earlierthis year.“Q2 saw a huge growth ofthe Decentralized Finance(DeFi) movement.”DeFi yield farming became the “in” thing to do. The launch of Compound Finance’sgovernance token, COMP caught everyone’s attention with COMP storming into the Top-30tokens in terms of market capitalization.Overall, DeFi tokens have outperformed all other token categories. The marketcapitalization of the Top-5 DeFi tokens grew by 133%. Their trading volume also almostdoubled in Q2.At CoinGecko, we have been kept busy with product improvements such as ourcollaboration with Hacken to improve Trust Score with a cybersecurity component, thelaunch of CoinGecko Candy, and the launch of our stablecoin section.We are always looking for ways to further improve CoinGecko to make it a better experiencefor you. Suffice to say, it’s been a pretty eventful Q2 and we’re looking forward to the secondhalf of the year!Bobby OngCOOTM LeeCoinGecko Q2 2020 CryptocurrencyReportCEO3

CoinGecko Q2 2020 Cryptocurrency Report4

CoinGecko Q2 2020 Cryptocurrency Report5

44.5%Top-30 Market Cap & Spot Trading VolumeTotal Market Cap Increasein Q2 2020In Q2 2020, total cryptocurrenciesmarket cap grew by 44.5%, but spottrading volume declined by 55%.Historically, market cap and spottrading volumes have been positivelycorrelated, but the trend seemed tohave shifted in Q2 2020.There could be few plausible reasonsfor such shift: users HODL-ing,diminished market confidence afterMarch’s Black Thursday, and marketinterest shifting towardsDecentralized Finance (DeFi) &Derivatives trading.CoinGecko Q2 2020 Cryptocurrency Report6

Top-5 Cryptocurrency Returns 22.0%Average Top-5 CryptoReturns in Q2 2020Q2 was a fantastic quarter for ETHand BTC. Ethereum was the largestgainer ( 69.3%), followed closelybehind by Bitcoin ( 42.5%).XRP, BCH & BSV failed to rallyalongside, and ended the quarterwith either minor gains or losses. 42.5% 69.3% 1.0% 1.5%-4.1%CoinGecko Q2 2020 Cryptocurrency Report7

Market Dominance Q2 2020(% change vs Q1 2020)68.1%1.66%( 0.3%)(-0.7%)10.2%1.18%( 1.6%)(-0.6%)3.16%1.08%(-1.3%)(-0.4%)3.90%9.70%( 0.2%)Top 30 Cryptocurrency Dominance Chart1( 0.8%)Ethereum was once again thebiggest gainer in Q2 2020.Its dominance increased by 1.6%,surpassing Bitcoin’s gain of 0.3%.1Others (8 - 30) refers to top 8 - 30 coins by Market Capitalization on CoinGecko as of 1 July 2020CoinGecko Q2 2020 Cryptocurrency Report8

Bitcoin Overview Q2 2020 vs. Q1 2020Q2 20202020 Peak on 13 Feb at 10,328.9048 Days Recoveryfrom Black Thursday12-13 MarchBlack Thursday: -35%17 March Bottomat 5,032.50Bitcoin closed Q2 up 78% fromMarch’s Black Thursday bottom.It took 48 days for Bitcoin to fullyrecover from the Black Thursday.However, Bitcoin has yet to break 2020’sprice peak of 10,328.90.Bitcoin’s average trading volume in Q2were 20% lower compared to Q1.CoinGecko Q2 2020 Cryptocurrency Report9

CoinGecko Q2 2020 Cryptocurrency Report10

Bitcoin Price Pre- and Post-Halving2020 BTC Price (USD)2016 BTC Price (USD)50 Days before Halving50 Days after HalvingHalvingBitcoin’s 3rd Halving (2020)50-Days before Halving, BTC’s price increased by 50%.50-Days after Halving, BTC’s price increased by 5%.Bitcoin’s 2nd Halving (2016)50-Days before Halving, BTC’s price increased by 11%.50-Days after Halving, BTC’s price decreased by 9%. 3rd Halving (11 May 2020)2nd Halving (9 July 2016)Despite having a market capitalization 15 times largerin 2020 than in 2016, Bitcoin showed a more bullishprice movement during the 3rd Halving event.Bitcoin went through its 3rd Halving on 11 May 2020 where miners’ block rewardwere halved from 12.5 BTC to 6.25 BTC per block.CoinGecko Q2 2020 Cryptocurrency Report11

Hash rates (H/s) refers to the speed atwhich a miner computes a hash in asecond. Miners all over the worldcompete to contribute hashes to “winthe lottery” and earn the blockreward.Bitcoin hash rates has seenexponential growth as more minersparticipate with increased scale andefficiency. Over the years, minershave switched from CPU/GPU/FPGAhobbyist to ASIC enthusiasts andfull-scale ASIC industrial operations.Fueled by the economic incentive ofBitcoin rewards, miners push thelimits of chipset manufacturing.Miners today must optimize all partsof their operations (energy sourcing,logistics, scale etc.)Source: Blockchain.comBitcoin Total Hash Rate (TH/s, logarithmic scale)1st Halving(28th November 2012)Total Hash Rate(TH/s)3rd Halving(11th May 2020)2nd Halving(9th July CPU/GPU/ FPGAhobbyist 14nm ASICenthusiast 14nm ASICindustrialCoinGecko Q2 2020 Cryptocurrency Report12

Total Hash Rate (TH/s)Immediately after the 2020 Halving,Bitcoin’s hash rate dropped by 27%.Block rewards were now halved causingcertain miners using older ASICs to beunprofitable. These unprofitable minersstopped operations causing the hashrate to drop.Total Hash Rate(TH/s)To remain profitable, some older minersswitched from mining Bitcoin to otherSHA256 compatible blockchains suchBitcoin Cash (BCH) or Bitcoin SV (BSV).3rd Halving(May 11th 2020)March’s Black Thursday causingcertain unprofitable miners toshut off their machinesDropped27%The large drop in hashrate post-halvingwas also contributed by minersswitching off their machines to move toSichuan. Miners do so to take advantageof the the rainy season in Sichuan thatwill result in excess hydro-electric powerin the region with lower electricity cost.Sichuan province accountedfor 54% of global miningshare in December 2019.Source: Blockchain.com, Slushpool.com, CoinShares.comCoinGecko Q2 2020 Cryptocurrency Report13

There was an increase in theaverage Bitcoin transaction feebefore, during, and immediately afterthe Halving.Average Bitcoin Transaction Fee (USD)3rd Halving (11 May 2020)Peak Fee 6.632 weeks before the Halving, averagetransaction fee was 306% higher( 2.15) compared to Jan-May average( 0.70).During the Halving period, averagetransaction fee was 647% higher( 4.53) compared to Jan-May average( 0.70).AverageFee 4.53AverageFee 2.15Average Fee 0.70Average Fee 1.08Post-Halving, average transaction feeshave gone back down to 1.08 thoughit remained higher than the Jan-Apraverage.Source: Blockchain.com, Slushpool.comCoinGecko Q2 2020 Cryptocurrency Report14

CoinGecko Q2 2020 Cryptocurrency Report15

3.65BTop-5 Stablecoins Q2 2020 OverviewQ2 2020 Circulation(change vs Q1 2020)Top-5 StablecoinsMarket Cap in Q2 2020 9.64BUSDT 3.38B ( 54.0%)Top-5 Stablecoins continued itsupward momentum, adding 3.65B ( 48.3%) and closing Q2with a total circulation of 11.2B. 0.99BUSDC 293M ( 42.0%) 241MThe majority of Q2 increase camefrom Tether 3.38B ( 54.0%)followed by USDC 293M( 42.0%).Trading volumes have dwindleddespite the rise in circulation. Thismay be a result of investorsseeking safe haven and usingstablecoins for non-trading relatedactivities such as staking/DeFi.PAX- 6.2M (-2.5%)BUSD- 23M (-11.7%)TUSD 3.6M ( 2.6%) 175M 140MTop-5 stablecoins by market capitalization taken on CoinGecko as of 1 July 2020.For the latest statistics of stablecoins, visit coingecko.com/en/stablecoinsCoinGecko Q2 2020 Cryptocurrency Report16

Velocity Volume / Market Cap.Stablecoins Velocity vs Bitcoin priceVelocity can be used as a proxy to putinto perspective how widely traded astablecoin is relative to its marketcap.Throughout April to mid-May, moststablecoins moved at a considerablevelocity.This suggests that as Bitcoin movesup, so do stablecoins as traders seekarbitrage opportunities.Market Cap % DistributionTrading Volume % DistributionFrom mid-May onwards, as Bitcoinprice stabilizes, velocity of stablecoinsdropped significantly. This indicates alikely behavior shift from trading toHODL-ing.CoinGecko Q2 2020 Cryptocurrency Report17

BTC Price vs. USDT CirculationIn H1 2020, USDT’s circulation increased by over100% from 4.7 billion to 9.6 billion.Q1 2020Q2 2020Issuance of USDT is highly positive correlatedwith Bitcoin’s price, especially in Q2 2020.USDT is the most popular trading pair in bothspot and derivative exchanges. It has seencontinuous strong growth in Q2 despite thedecrease in spot trading volume. This may be dueto the increased usage in businesses engaged inimport & export trades in China & Russia.The issuance of USDT is highlypositive correlated with BTCPrice in Q2 2020.CoinGecko Q2 2020 Cryptocurrency Report18

CoinGecko Q2 2020 Cryptocurrency Report19

CoinGecko Q2 2020 Cryptocurrency Report20

Top-10 Spot Exchange Trading VolumeIn Q2 2020, the average of Top-10Spot Exchange trading volume wentdown 7% from Q1 2020.This is similar with our Q2 2020 Part 1 Report, where we found thattotal volume for Top-30cryptocurrencies were down 55%compared to Q1 2020.Source: Selected Top-10 Exchanges by CoinGecko’s Trust ScoreCoinGecko Q2 2020 Cryptocurrency Report21

Top-10 Spot Exchange Average Trading VolumeMarket Share %(Average Q2 Trading Volume)-6.9%-10.0%38%35%7%-3.2%-3.4%5%-3.7%4% 1.3%4% 14.8%3%-33.8%1%-3.3%1%-1.5%1%-32.6%Source: Selected Top-10 Exchanges by CoinGecko’s Trust ScoreOverall Q2 spot trading volumehad a net decline of 7% vs. Q12020. However, two exchangesgained its trading volume in Q2:Kraken and Bitstamp.Bitstamp had the highest growthin its trading volume, growing14.8% ( 20M), accounting for 90%of the total gross gain in volume.In Q2 2020, Binance’s tradingvolume went down by 10% ( 183M)compared to Q1 2020; accountingfor 53% of the total gross decline intrading volume.The second major contributor tothe decline is Bitfinex. Its tradingvolume went down by 34% ( 66M).CoinGecko Q2 2020 Cryptocurrency Report22

Top-5 Spot Decentralized Exchange Average Trading VolumeMarket Share %(Average Q2 Trading Volume) 56.1%36% 152.4%35%Uniswap V2 was launched on 18 May2020 and their average tradingvolume was already over 11.4M,similar to Uniswap V1.14% 14.9%12%-14.8%3% 173.0%Source: Selected Decentralized Exchanges listed on CoinGeckodYdX trading volume is based on spot trading volume, excludes derivatives volume.** Uniswap V2 was not included in the calculation for total average trading volumeOverall, Top-4 DecentralizedExchanges (DEX) trading volume**had a net increase of 56.1% in Q2compared to Q1 2020.Uniswap V1 had a large jump of152.4% ( 7M), where it contributedto 85% of total gross gains.Kyber Network was the only DEXthat had a decline in its tradingvolume, going down 14.8% ( 689K)The surge in DEX trading volumewas due to the rise ofDecentralized Finance (DeFi)movements such as yield-farmingusing stablecoins and DeFigovernance tokens.CoinGecko Q2 2020 Cryptocurrency Report23

In Q2 2020, Binance was still the web traffic leaderwith 30% market share (and by a considerablemargin). Binance grew by 9% while the rest of theindustry grew by an average of 5%.Top-20 Crypto Exchange Traffic (Q2 vs Q1, Cumulative)Top GainerOKEx 239.3%However, our research suggests that traffic growthfor certain exchanges may be inorganic, as toptraffic referrers were crypto ad or faucet sites.OKEx registered the highest web traffic gain of 239% in Q2.However, this growth may appear inorganic asits top 5 referring sites were crypto ad / faucet sitessuch as adbtc.top and cointiply.com.Reported trading volume also did not increase inaccordance with the web traffic spike.LeaderBinance 9%Top LoserHuobi-31.7%Industry Average 11.4% increasein Web TrafficBinance also exhibited similar behavior with its top2 referrers being crypto ad / faucet sites.Source: Similarweb.comCoinGecko Q2 2020 Cryptocurrency Report24

CoinGecko Q2 2020 Cryptocurrency Report25

Top-5 Exchange TokensIn Q2 2020, Top-5 Exchange Tokens total market capincreased by 24%.However the total trading volume for the Top-5Exchange Tokens were down by 10% Q-o-Q.The downtrend in the trading volume may be asignal that investors were more careful with theirtrading or there were more retail participants whotrade a minimal amount of coins while the whales mayhave been practising HODL.Top-5 Exchange Tokens Market Cap as at 30th June 2020(vs. growth in Q2 2020) 2.3B 1.4B 1.2B 970M 287M( 20%)( 16%)( 21%)( 25%)(5%)*Binance Coin (BNB)OKB (OKB)Source: Selected Top-5 Exchange-Based Tokens on CoinGecko*FTT token market cap starts from 17 April 2020LEO Token (LEO)Huobi Token (HT)FTX Token (FTT)CoinGecko Q2 2020 Cryptocurrency Report26

Top-5 Exchange Token H1 2020 Price ReturnOverall, top 5 exchangetokens had good returns inH1 2020.March’s Black Thursday 93% 54% 51% 35%Among the top-5 exchangetokens, OKB performed thebest with over 90% increaseYTD.BNB has recovered from itsprice decline in Q1 2020 andended Q2 2020 up 12%. 12%BNB was trading 8% ( 12.60)below 1 January priceSource: Selected Top-5 Exchange-Based Tokens on CoinGeckoBNB ended Q2 up 12%( 15.42)CoinGecko Q2 2020 Cryptocurrency Report27

Top-5 Exchange Token Q2 2020 Price ChangeQ2 2020 Price Change(vs. Q1 2020 Price Change)The average return in Q22020 for top 5 exchangetokens were 21%.BNB ended Q2 2020 up22%. This was muchbetter than its Q1performance of -8%. 25%HTBNBLEOOKB had slower growth( 17%) in Q2 2020,compared to Q1 2020( 65%) 22%(-8%) 21%( 27%) 20%FTTOKBSource: Selected Top-5 Exchange-Based Tokens on CoinGecko( 21%)( 12%) 17%( 65%)CoinGecko Q2 2020 Cryptocurrency Report28

Top-5 Exchange Token Q2 PerformanceMarket Share %(Average Q2 Trading Volume)-10% 2.3%36%-21.1%35%-15.0%14%12%3%Overall trading volume wentdown by 10% vs. Q1 2020.There were two gainers in Q2:BNB and LEO.BNB was a major gainer withan increase of 2.3% ( 6.8M),accounting for 58% of the totalgross increase in tradingvolume. 66.0%-66.1%Source: Selected Top-5 Exchange-Based Tokens on CoinGeckoHT was the biggest loser with aloss of 21.1% ( 55M) in tradingvolume, accounting for 65% ofthe gross loss in tradingvolume.CoinGecko Q2 2020 Cryptocurrency Report29

Top-5 Exchange-Based Tokens Burn StatisticsTickerQ2AmountburnedQ2 %BurnedPrice(1 Jul2020)% PriceChange(Q2)OKExOKB3,509,8740.4% 5.0517%FTXFTT1,591,2470.5% 2.8720%BitfinexLEO5,661,4400.6% 1.2621%BinanceBNB3,373,9881.7% 15.3522%HuobiHT11,542,7622.3% 4.1525%ExchangeQ2 Price Growth vs. % of Tokens burnedPrice % change% burned in Q2Price change seemed to be directly correlated with amount burned, thoughit appears that there are diminishing returns. Note that many other factorsmay also influence price movement.Source: Selected Top-5 Exchange-Based Tokens on CoinGecko*Burn % is calculated based on initial supply (eg. 200m for BNB)CoinGecko Q2 2020 Cryptocurrency Report30

CoinGecko Q2 2020 Cryptocurrency Report31

CoinGecko Q2 2020 Cryptocurrency Report32

Trading Volume Dominance (%)Q2 2020 Volume Dominance(vs Q1 %Huobi DM nDerivatives trading volumetrended downwards andshowed sign of shrinkage in Q2.In Q2, BitMEX & Binance Futures saw largedeclines in terms of volume dominance - likelydue to Huobi’s entrance to the market.Source: CoinGecko. Dominance is measured for top-8 exchanges trading Bitcoin Perpetual Swaps*Huobi BTC Perpetual swap pair only tracked starting 4th April 2020. 0.3%-4.3%2.2%Huobi ended Q2 with 18.7% volumedominance - an impressive feat given thatthe market appeared to be stagnant at best.CoinGecko Q2 2020 Cryptocurrency Report33

Trading Volume ( Billion) by exchangeQ2 saw an industry widedecline, with BitMEX(- 1.3B) & BinanceFutures (- 1.1B) bearingthe brunt of the losses.Despite the decline,Huobi bucked the trendand managed to grab upto 800M worth of dailytrading volume.It would seem thatderivatives are becomingless popular amongstretail traders.Q2 2020 Trading Volume(vs. Q1 2020) 1.5B 1.0BBitMEX- 1.3BBinance- 1.1B 815M 536MBybit- 290MHuobiSource: CoinGecko. Dominance is measured for top-8 exchanges trading Bitcoin Perpetual Swaps*Huobi BTC Perpetual swap pair only tracked starting 4th April 2020.N/A*OKEx 251M 129M- 235M- 160MFTX 35M 96MDeribit- 80MKraken- 1.7MCoinGecko Q2 2020 Cryptocurrency Report34

Open Interest Dominance (%)Q2 2020 Open Interest Dominance(vs Q1 2020)35.3%BitMEX-11.6%20.3%Binance9.8%15.2%Bybit 4.6%Huobi DM N/A*6.4%OKEx-1.8%6.3%FTX1.7%KrakenOverall, open interest volumedoubled in Q2 2020 - investorsare expecting more volatility.BitMEX lost -11.6% in dominance, signalling a shift ininvestor preferences. Despite losses, BitMEX stillremained as market leader for BTC perp swaps in Q2.Source: CoinGecko. Dominance is measured for top-8 exchanges trading Bitcoin Perpetual Swaps*Huobi BTC Perpetual swap pair only tracked starting 4th April 2020. 0.5% 2.0%-2.3%5.0%Deribit-1.2%Binance Futures and Bybit were bothfast catching, posting gains of 2% and 4.6% respectively.CoinGecko Q2 2020 Cryptocurrency Report35

Open Interest ( billion) by ExchangeDespite seeing a huge 11%decrease in its marketdominance, BitMEX’s openinterest actually grew 204M to 665M ( 44%).Binance Futures had asimilar absolute increasein its open interest butworth noting itoutperformed BitMEXwith a growth of 112%.Bybit & Huobi are the nextlargest contributor( 182M, 185M) to netincrease in open interest. 665MBitMEX( 204M)Q2 2020 Open Interest Dominance(vs. Q1 2020) 383MBinance ( 203M) 185M 286MBybit( 182M)HuobiN/A*Source: CoinGecko. Open interest is measured for top-8 exchanges trading Bitcoin Perpetual Swaps*Huobi BTC Perpetual swap pair only tracked starting 4th April 119M 120MOKEx( 39M)FTX( 34M) 94MDeribit( 33M) 31MKraken( 20M)CoinGecko Q2 2020 Cryptocurrency Report36

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(Average Q2 Trading Volume) 38% 35% 7% 4% 4% 1% 3% 1% 5%-6.9% Overall Q2 spot trading volume had a net decline of 7% vs. Q1 2020. However, two exchanges gained its trading volume in Q2: Kraken and Bitstamp. In Q2 2020, Binance’s trading volume went down by 10% ( 183M) compared to Q1 2