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State of the Network Best of 2020
In this special edition we look back at the best issues of State of the Network over the past year. We’ve organized issues into five main themes that we covered throughout 2020:
Bitcoin’s Macro Picture
Valuation and Fundamentals
Exchanges and Trading
Stablecoins and DeFi
Mining and Security
Bitcoin’s Macro Picture
Bitcoin became intertwined with traditional markets this year due to changing macro conditions and a big increase in institutional interest. We covered Bitcoin’s journey over the course of 2020, from the March crypto crash to Q4’s institutional endorsements. Last week, we released our 2020 Year In Review summarizing crypto’s year quarter by quarter:
Source - Issue 42: Data Shows Cryptoasset Selloff was Driven by Short-term Holders
Source - Issue 79: Signs of Institutional Investors
Valuation and Fundamentals
Throughout the year, we analyzed different approaches to valuation and explored crypto fundamentals. In September we introduced Bitcoin: A Novel Economic Institution, a joint research report with ARK Invest that laid out the case for bitcoin as the most compelling monetary asset to emerge since gold. In Issue 80 we released an in-depth research report about using on-chain data to gauge bitcoin market cycles: The Bitcoin On-chain Indicators Primer. We also introduced several new metrics throughout the year, including free float supply:
Source - Issue 80: The Bitcoin On-chain Indicators Primer
Source - Issue 57: Introducing Free Float Supply
Exchanges and Trading
Another focus was crypto’s market structure, including exchanges and trading activity. We analyzed trading volume and introduced our “Trusted Trading Volume” framework to help identify legitimate trading volume. We analyzed the derivatives market including a high level look at perpetual swaps. And we covered exchange lawsuits and mishaps like the fallout after the arrest of the BitMEX leadership team:
Source - Issue 61: Introducing Coin Metrics' Trusted Volume Framework
Source - Issue 72: Analyzing the Fallout From the BitMEX Lawsuits
Stablecoins and DeFi
In Issue 59 we introduced an in-depth research report on the rapid Rise of Stablecoins. We continued to write about stablecoins throughout the year and analyzed their supply distribution and on-chain activity. We also covered the rise of DeFi, including a look at the state of DeFi tokens:
Issue 50: Stablecoin Heatmaps Show Tether is Mostly Used During Asian and European Market Hours
Issue 54: Analyzing Stablecoin Supply and Activity Distribution
Issue 64: The DeFi Fee Explosion: How YAM’s Collapse Drove Ethereum Fees to New Heights
Source - Issue 59: The Rise of Stablecoins
Source - Issue 77: The State of DeFi Tokens
Mining and Security
We also wrote extensively about Bitcoin mining and security. We took a macro look at miner economics and did a deep dive into the data on hash rate distribution. We also introduced several new metrics including a suite of metrics on miner flows and on-chain activity:
Issue 44: Understanding Miner Econonomics from First Principles
Issue 49: Introducing The CMBI Bitcoin Hash Rate Index and Observed Work
Issue 75: Following Flows: A Look at Miners’ On-Chain Payments
Source - Issue 45: The Signal and the Nonce Redux: From S9s to S17s
Source - Issue 68: Measuring Bitcoin's Decentralization
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Coin Metrics’ State of the Network, is an unbiased, weekly view of the crypto market informed by our own network (on-chain) and market data.
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