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Has the liquidity of digital currencies been stagnant?

Author:Hubi Date:2018-07-25 15:00:00

As of June 1st, 2018, CoinMarketCap had collected 1,644 cryptocurrencies, sorted by market value, and ranked the top three and three of its top 100 cryptocurrencies.


The transaction of digital currency adopts the pattern of T+0, which means that its liquidity will be higher than T+1, and from the perspective of turnover, its liquidity is not high compared with the stock market, but does this mean Is the flow of the entire blockchain low or has dropped to a low point?


1, TEDA currency: the success of stable currency


The high turnover of TEDA currency is due to the fact that it anchors the US dollar and implements a 1:1 linkage standard with the US dollar. Each TEDA currency will lock a dollar, so it is equivalent to the legal currency to some extent.


Due to a series of reasons, it is difficult for most countries and regions to directly purchase tokens through the legal currency. The tokens that can usually be purchased directly in the legal currency are TEDA currency, BTC, ETH, and some platform currency (inside the red box), while other tokens need to be purchased through the red frame token. Unlike BTC and ETH, TEDA currency is less volatile and the currency value is more stable, which reduces the risk of trading to some extent.


When the market fluctuates violently and fluctuates sharply, it needs to outstrip supply. Therefore, the over-the-counter trading of TEDA coins will generate a certain premium. Statistics on the past 15 months, it is not difficult to find that, as of May this year, Tether's trading volume has reached a historical high in January, and only two-thirds of its turnover. In this period of time, Tether is in the state of hypertransmission. The reason for the super fate can only indicate that the number of people entering the field has increased, or that there are more users who choose to use Tether to hedge.


2, bitcoin, Ethereum turnover did not decrease


To a certain extent, ETH and BTC can be regarded as the dollar in digital currency, which is itself linked with other digital currencies, and small currencies cannot be exchanged directly with other small currencies. Nowadays, many media or individuals have published a series of bitcoin and Ethereum lost its liquidity, and ear finance TokenData uses data to tell you that liquidity has not been lost and only the market value has been lost.


Bitcoin's monthly trading volume and monthly turnover rate can almost be said to reach a high point at the same time in January. Today's turnover and turnover are several times before November 2017. Comparing the highest point to the present, the turnover fell by nearly half, and the turnover rate fell by only one-third, indicating that the transaction was still hot.


Ethereum is similar to Bitcoin in that both the monthly turnover rate and the monthly turnover both peak at the same time. However, it was observed that its trading volume was more prominent in January of 2018, and its turnovers have been within normal fluctuations. Adding the price to this parameter will give you a better understanding of why the rate of decline in turnover is faster than changing hands.


The price of coins fell by half and the change of hands did not change, and the turnover fell by half. This is also one of the main reasons why many investors think the digital currency loses liquidity. In the blockchain industry, it may be more accurate to use handoffs to measure liquidity. All say one dollar a day and one year in the world. The currency's price fluctuates drastically, and measuring liquidity by turnover alone is not accurate.


3, digital currency market potential is still large


At present, the total market value of the digital currency market is also less than 300 billion U.S. dollars, and there is still a large gap between the total market value of U.S. stocks, A shares and Hong Kong stocks of trillions of U.S. dollars. Bitcoin accounted for 80% of the market value from the very beginning and now 40%, with multiple currencies accounting for more than 5%. The market is moving in multiple directions and is not limited to Bitcoin. The turnover of the overall market also reached more than 5% of the total market value, and liquidity was not as low as expected. And, digital currency still has the form of over-the-counter trading, and real trading data may be higher.