Coin Metrics' State of the Network

Coin Metrics' State of the Network focuses on the analysis and insights into blockchain technology, cryptocurrency markets, and the decentralized finance (DeFi) ecosystem. It covers topics like hash functions, mining, market dynamics, stablecoins, regulatory developments, and the impact of technological upgrades on digital asset valuations and adoption.

Blockchain Technology Cryptocurrency Markets Decentralized Finance (DeFi) Market Analysis Regulatory Landscape Mining and Energy Consumption Stablecoins Exchange-Traded Funds (ETFs) Digital Asset Valuation Technological Upgrades and Adoption

The hottest Substack posts of Coin Metrics' State of the Network

And their main takeaways

Breaking Byzantine Fault Tolerance

0 implied HN points • 27 Feb 24
đź•ą Technology Blockchain Cryptocurrency Network Security Economic Analysis Market Trends
  1. The Total Cost to Attack (TCA) metric introduced in the research is a valuable tool for assessing the economic viability of potential threats to Bitcoin and Ethereum networks.
  2. Analyzing the economics of potential attacks on blockchain networks highlights significant economic disincentives for attackers, with the costs to compromise Bitcoin ranging from $5B to $20B and Ethereum's cost estimated around $34 billion, proving to be prohibitively high.
  3. The study emphasizes the security mechanisms of major blockchain networks like Bitcoin and Ethereum, indicating a promising future for the cryptocurrency industry amidst market growth.

Following Flows V: Pool Cross-Pollination

0 implied HN points • 05 Mar 24
đź•ą Technology Cryptocurrency Blockchain Mining Decentralization Data Analysis
  1. Decentralization concerns exist within Bitcoin mining due to the dominant control by a few major pools like Foundry and AntPool.
  2. Cross-pollination between mining pools is observed through shared addresses and flow of funds, indicating potential coordination among pools.
  3. Mining pools utilize different payout models and external networks like Cobo's Loop for liquidity, leading to a complex landscape with hidden consolidation of power.
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Coin Metrics’ State of the Network: Issue 215

0 implied HN points • 11 Jul 23
đź’° Finance Investment Digital Assets ETFs Crypto
  1. The introduction of spot Exchange-Traded Funds (ETFs) could simplify investment in digital assets for American investors.
  2. Investors face challenges with tax-advantaged accounts when wanting to invest directly in digital assets, creating a need for convenient exchange-traded products.
  3. Grayscale's trust products, such as the Bitcoin Trust (GBTC), fluctuate in value compared to the underlying asset, impacting investors' risk profiles and creating opportunities for arbitrage.

Ethereum’s Dencun Upgrade

0 implied HN points • 06 Feb 24
đź•ą Technology Blockchain Smart Contracts
  1. The Ethereum Dencun upgrade is a significant advancement that enhances scalability and security for the network.
  2. EIP-4844 introduces 'blob-carrying transactions' to improve data availability scaling and shift demand towards Layer-2 solutions.
  3. Upgrades such as EIP-4788, EIP-7514, and EIP-7045 impact validators, staking operations, and security within the Ethereum ecosystem.

State of the Network’s 2024 Year in Review

0 implied HN points • 24 Dec 24
đź”® Crypto Bitcoin ETFs Stablecoins Market Trends Regulation
  1. 2024 was a big year for crypto, highlighted by Bitcoin ETFs launching and Bitcoin's price soaring to over $100K. It showed a strong recovery from the previous crypto winter.
  2. Meme coins and stablecoins gained much popularity, with stablecoins being used more globally for payments and financial services. This shift indicates their growing importance in the financial system.
  3. The U.S. presidential election boosted crypto markets due to pro-crypto policies, leading to record institutional interest and optimism for the future. Yet, some regulatory uncertainties are still present.

Market Dynamics and Risks of Liquid Staking Derivatives

0 implied HN points • 12 Mar 24
đź’° Finance Cryptocurrency Market Dynamics Liquidity Risks
  1. Staking on the Ethereum network has seen significant growth, with 31M ETH staked on the Beacon chain, representing 26% of the supply.
  2. Liquid Staking Tokens (LST's) like Lido's stETH & wstETH have become a dominant form of collateral, with $9.5B in collateral across DeFi lending markets.
  3. Market risks associated with Liquid Staking Tokens include de-pegging, liquidity risk, and potential market instability during significant events like the Terra Luna collapse.

Crypto Market & Polymarket Dynamics Heading into Elections

0 implied HN points • 05 Nov 24
đź”® Crypto Market Analysis Investment Strategies Election Impact
  1. Bitcoin usually saw big gains after U.S. elections, but the amount gained has been going down each time. Events like Bitcoin halvings and changes by the Federal Reserve also affect these gains.
  2. Around U.S. elections, the price of Bitcoin becomes more volatile and tends to stay that way for about a month after. This means traders are adjusting to new information as the election gets closer.
  3. Polymarket, a prediction market, shows changing odds for the election, with international traders reacting to U.S. political news, often trading during U.S. night hours. This suggests a global interest in U.S. elections.

Understanding Staking Yields and Economics on Ethereum & Solana

0 implied HN points • 03 Dec 24
đź”® Crypto Blockchain Staking Economics Finance Technology
  1. Ethereum has about 34.4 million ETH staked, making up 28% of its total supply, while Solana has a higher staking ratio at 51% with 297 million SOL staked. This shows that more people are willing to stake their SOL due to easier entry requirements.
  2. Ethereum has more validators, about 1.07 million, compared to Solana's 5,048 validators. However, Solana engages over 1.21 million delegators, showing a lot of participation despite fewer validators.
  3. The staking yields differ significantly: Ethereum offers around 3.08% yield, while Solana offers a much higher yield of 11.5%. The differences come from their inflation models and reward structures for validators versus delegators.

MicroStrategy’s Bitcoin Mega Strategy

0 implied HN points • 26 Nov 24
đź”® Crypto Bitcoin Investment Finance Market Trends Corporate strategy
  1. MicroStrategy has a unique investment strategy focused on Bitcoin, holding a huge amount of it, which makes them the largest corporate holder of Bitcoin worldwide.
  2. They finance their Bitcoin purchases by using convertible bonds, allowing them to borrow money at low costs to buy more Bitcoin.
  3. While their approach has been successful, it carries risks due to Bitcoin's price volatility and the high valuation of MicroStrategy's stock compared to its Bitcoin assets.

Data-Driven Update on Stablecoins

0 implied HN points • 19 Nov 24
đź”® Crypto Stablecoins Market Trends
  1. The total supply of stablecoins has reached $189 billion, with Tether's USDT being the most popular, making up 66% of that amount. Ethereum holds a significant part of the stablecoin market, showing its importance in the space.
  2. Stablecoins are vital in up markets as they help facilitate trading, with volumes hitting $120 billion. They also act as a safe place to store value, making them useful in both rising and falling markets.
  3. On-chain activity with stablecoins is growing, especially on Solana, where transaction counts have soared. New stablecoins are also entering the market, driven by demand for yield and innovative financial products.

The Election Bull Run From the Perspective of Options Markets

0 implied HN points • 12 Nov 24
đź”® Crypto Bitcoin Options Market Trends Regulation
  1. Bitcoin trading was super active during and after the election, reaching new highs in value.
  2. Options markets showed strong focus on call options, indicating that traders are feeling very positive about Bitcoin's future price.
  3. Implied volatility dropped sharply after the election, suggesting that uncertainty has decreased and traders expect more stability ahead.

Coin Metrics’ State of the Network: Issue 200

0 implied HN points • 28 Mar 23
đź”® Crypto Bitcoin Mining Taxation Market Trends
  1. Bitcoin miners have seen a boost in revenue from Inscriptions despite some challenges with chain splits and indexing issues.
  2. American mining operations are facing challenges from bankruptcy, severe weather, but have maintained a strong foothold in the global hashrate landscape.
  3. Miners are enjoying a Q1 revenue rebound, but are struggling with increased energy costs and the potential impact of a proposed 30% excise tax on mining operations in the U.S.

Coin Metrics’ State of the Network: Issue 209

0 implied HN points • 31 May 23
đź”® Crypto Market Trends Correlations Volatility
  1. The digital asset market has evolved significantly since Bitcoin's inception, with emerging sectors like blockchain infrastructure, on-chain derivatives, DeFi, and NFTs.
  2. Sector correlations, like BTC and ETH, can provide insights into the relationships among different sectors within the digital asset market.
  3. Market volatility varies across sectors, with assets in the Decentralized Finance sector experiencing the highest average volatility in 2023.

Previewing Coinbase Q4 2024 Earnings

0 implied HN points • 11 Feb 25
đź”® Crypto Market Analysis Investment Trends Financial Reporting Blockchain Technology
  1. Coinbase is expected to report around $2 billion in revenue for Q4 2024, thanks to a strong increase in trading and subscription revenues. This is a significant growth compared to previous quarters.
  2. The trading volume on Coinbase hit about $430 billion, which is the highest in over two years. This surge is likely due to positive market conditions following the U.S. election.
  3. Coinbase's Layer-2 platform, Base, has shown strong profitability, generating over $26 million in profit while maintaining high margins despite rising costs. This highlights the success of its new business model.

Checking in on Solana After the Launch of TRUMP

0 implied HN points • 04 Feb 25
đź”® Crypto Market Analysis Trading
  1. The launch of the $TRUMP coin led to a big increase in trading activity on Solana, with exchange volumes reaching $20.5 billion and active wallets growing by 25%.
  2. Solana's stablecoin supply jumped from $6.1 billion to $12 billion, improving the liquidity in its ecosystem, mostly from USDC.
  3. Transaction fees rose significantly during the network's busy period, hitting $30.6 million in total, while most users still faced low fees for their transactions.

Precog and Bittensor: Redefining Crypto Market Intelligence

0 implied HN points • 28 Jan 25
đź”® Crypto Blockchain Market Trends Decentralization Data Analytics
  1. Bittensor is a decentralized network that rewards users for solving AI tasks. This way, the best performers get recognized and compensated for their work.
  2. Precog, built on Bittensor's infrastructure, allows users to compete in predicting crypto prices. Those who make accurate forecasts can earn rewards, making the process both competitive and engaging.
  3. The entire system uses blockchain technology to ensure fairness and transparency. This way, everyone involved can trust that rewards are distributed based on performance.

Tether’s Ascent: Breaking Down the Dominant Stablecoin's Growth

0 implied HN points • 23 Jan 24
đź’° Finance Stablecoins Adoption
  1. Tether's supply has reached new heights, with significant growth and expansion on various blockchain networks.
  2. Tether is gaining popularity in decentralized finance (DeFi) applications, particularly in smart contracts and money markets.
  3. Tether's usage patterns show widespread adoption, especially in emerging markets, and its nature as a stablecoin facilitates trusted digital asset trading on exchanges.

Market Structure on the Cusp of Spot Bitcoin ETF Launches

0 implied HN points • 09 Jan 24
đź’° Finance Cryptocurrency Market structure ETFs
  1. The cryptocurrency market eagerly awaits the launch of a spot Bitcoin ETF, marking a historic milestone.
  2. BTC spot trading volumes are affected by ETF anticipation, surging back with potential ETF launches on the horizon.
  3. The volatility and return characteristics of digital assets like BTC are evolving, showcasing their potential role in diversified investment portfolios.

Bitcoin ETFs, One Year Later

0 implied HN points • 21 Jan 25
đź”® Crypto Bitcoin ETFs Market Trends Investment strategy
  1. In the past year, Bitcoin ETFs have gathered a lot of money, reaching about $115 billion in assets. This shows strong interest from both individual and institutional investors.
  2. BlackRock's Bitcoin ETF is leading the pack, holding around 540,000 BTC, while Grayscale has seen a drop in its holdings. This shift indicates a trend towards lower-cost investment options.
  3. Bitcoin ETFs are changing how people invest in crypto, making it more mainstream. They also help support the demand for Bitcoin, which in turn influences its price movements.

Coin Metrics’ 2025 Crypto Outlook

0 implied HN points • 14 Jan 25
đź”® Crypto Digital Assets Market Trends Blockchain Investments Regulations
  1. Bitcoin is expected to reach between $140K and $170K in 2025. This growth will come from more people adopting it and from ETF purchases.
  2. Ethereum is predicted to perform better, aiming for a price of $7,500 to $10,000 due to rising demand and new technologies being developed.
  3. Stablecoins are set to grow a lot in 2025, potentially doubling in size. People will use more of them for payments and trading as they become more accepted.

Bitcoin’s 16th Birthday

0 implied HN points • 07 Jan 25
đź”® Crypto Blockchain Investment Finance Technology Market Trends
  1. Bitcoin is 16 years old, and it has changed how we think about money. It started as a small idea and now is seen as a reliable alternative to regular money.
  2. Unlike traditional currencies, Bitcoin is not controlled by governments. This makes it appealing to people who want more control over their own finances.
  3. Over the years, Bitcoin has become more stable, making it a more credible investment option. Developments like Bitcoin ETFs have helped it gain trust in the financial world.

Conducting the ETH Census

0 implied HN points • 30 Jan 24
đź”® Crypto Technology Blockchain Data Analysis Economics Innovation
  1. Calculating Ethereum's total supply is a complex task due to its multi-layered system.
  2. The total supply of ETH as of January 20th, 2024, was 120,179,693.24908, but accurate tracking is essential to avoid double counting.
  3. Accurate supply metrics impact various aspects like wealth distribution, market capitalization, and index creation in the cryptocurrency space.

At the Crossroads: Bitcoin ETFs & Coinbase

0 implied HN points • 21 Feb 24
đź’° Finance Crypto Investing Earnings Regulation Market Analysis
  1. The launch of Bitcoin spot ETFs has led to significant changes in Bitcoin distribution and trading volume, with inflows into new ETFs and outflows from existing ones.
  2. Coinbase's Q4 2023 earnings reported strong revenue, with a notable increase in transaction revenue and diversification into subscription and services revenue.
  3. Coinbase's revenue growth is attributed to factors such as staking services, stablecoins, and new business verticals, showcasing strategic diversification and adaptation to market trends.

Navigating the Avalanche: An Introduction to the Avalanche Network

0 implied HN points • 13 Feb 24
đź•ą Technology Blockchain Cryptocurrency Tokenomics
  1. Avalanche is a blockchain network with unique architecture and features like subnets, making it versatile for a wide range of applications like DeFi and gaming.
  2. The AVAX token is central to Avalanche, used for transaction fees, network security through staking, and has shown notable success with market capitalization peaking at $30B.
  3. Avalanche's consensus mechanism, called Avalanche Consensus, is structured to handle high throughput with fast transaction speeds, enhanced scalability, and a permissionless approach different from traditional blockchains.

Coin Metrics’ State of the Network: Issue 211

0 implied HN points • 13 Jun 23
đź”® Crypto Bitcoin Mining Energy consumption Data Analysis
  1. Study presented a new methodology for estimating Bitcoin's energy consumption using data patterns from mining hardware.
  2. Mining process involves searching for a special number called 'nonce' and each mining machine leaves an identifiable pattern.
  3. The study estimated Bitcoin's power draw at 13.4 GW in May 2023, which is around 16% less than Cambridge University's estimate, showcasing the importance of accurate analysis in the cryptocurrency industry.

Coin Metrics’ State of the Network: Issue 213

0 implied HN points • 27 Jun 23
đź”® Crypto Market Analysis Bitcoin Ethereum Regulation Digital Assets
  1. Bitcoin's dominance in the digital assets market is at 58%, the highest since April 2021.
  2. Bitcoin's market cap of $590B is significantly higher than the aggregate market cap of other assets in the cryptocurrency universe.
  3. Ethereum continues to track Bitcoin closely, maintaining a significant lead in the smart contract platform sector.

Coin Metrics’ State of the Network: Issue 214

0 implied HN points • 05 Jul 23
đź”® Crypto Market Analysis Regulation
  1. Digital asset markets experienced fluctuations in performance during Q2 2023 due to regulatory scrutiny and evolving market dynamics.
  2. Stablecoins like USDT and USDC saw contrasting trends in supply, impacted by regulatory pressures and market conditions.
  3. Institutional interest in cryptocurrencies surged in the second half of Q2 2023, marked by ETF applications and positive market developments.

Coin Metrics’ State of the Network: Issue 216

0 implied HN points • 18 Jul 23
đź”® Crypto Regulation Market Impact Exchanges Securities
  1. A milestone ruling favored Ripple Labs Inc. in its case with the SEC regarding the XRP token.
  2. The market reacted strongly to the ruling, with XRP price surging and U.S. exchanges re-listing XRP for trading.
  3. The ruling highlights the complexities of applying securities laws to digital assets and the ongoing battle between the crypto industry and regulators.

Coin Metrics’ State of the Network: Issue 217

0 implied HN points • 25 Jul 23
đź”® Crypto Regulation Blockchain Securities Market Analysis
  1. Determining which cryptocurrencies are considered securities remains a complex and critical issue in the evolving regulatory landscape.
  2. On-chain metrics provide valuable insights but are not the sole criteria for classifying assets as securities.
  3. Clear securities regulations could bring transparency and compliance measurements to the crypto industry, with on-chain data playing a potentially crucial role.

State of the Network’s Q4 2024 Mining Data Special

0 implied HN points • 17 Dec 24
đź”® Crypto Mining Market Trends Hardware Profitability
  1. The recent Bitcoin halving really affected how much miners earn. Even though their revenue dropped, rising Bitcoin prices helped a bit.
  2. Publicly traded Bitcoin mining companies are seeing a lot of ups and downs compared to Bitcoin itself. Firms with better equipment and finances are doing better than others.
  3. Bitcoin miners need to keep upgrading their technology and operations to stay competitive, especially after big events like halving that change their earnings.

Where in the World is Crypto Trading?

0 implied HN points • 10 Dec 24
đź”® Crypto Market Analysis Regulation
  1. The Kimchi Premium is when crypto prices in South Korea are much higher than in the rest of the world, mainly due to strict local regulations and high demand.
  2. Crypto trading shows strong seasonal patterns, with different exchanges getting more activity during certain times based on location and regulation.
  3. Recently, older cryptocurrencies like XRP and ADA are seeing price increases and a rise in on-chain activity, reflecting strong user interest in certain regions, especially Asia.

Exploring Crypto Market Dynamics through Options Data

0 implied HN points • 20 May 25
đź”® Crypto Market Analysis Derivatives Volatility Trading
  1. Options are becoming a key part of trading in crypto. They help traders manage risks, express their views on price changes, and understand market sentiment better.
  2. The use of Bitcoin options has surged significantly, showing that more people are getting involved in options trading. Most of the activity happens on the Deribit exchange, which is quite popular among traders.
  3. Market positioning through options shows a bullish outlook for Bitcoin, while Ethereum has a more mixed sentiment. This means traders are more confident about Bitcoin's future price than they are about Ethereum's direction.