so far 2025 has been an absolute roller coaster we
have the most pro- crypto administration ever in Washington DC but we’ve also had the largest hack
by dollar value in crypto’s history btc’s price has crashed and recovered and the fear and greed
index is up and down like a yo-yo it’s all a bit chaotic that’s very chaotic fortunately though a
recent report offers a clearer picture of what’s really going on in this unpredictable space so
today we’ll summarize this report in simple terms and tell you what it could mean for crypto in 2025
my name is Guy and you’re watching the Coin Bureau the report we’ll be summarizing for you today
is titled quote charting crypto and is for Q1 of 2025 it was co-authored by Coinbase which needs
no introduction and Glass Node a leading onchain analytics company as always we’ll leave a link
to the full report in the description below but we’ll be giving you the highlights here in this
video now the report opens with some key market insights according to the authors a defensive
strategy could be ideal in the short term as the market continues to trend lower but things
should improve in Q3 of this year when the market rebounds the report adds that quote both BTC and
the Coin50 index have recently broken below their respective 200-day moving averages which signals
potential bearish trends in the overall market however the report cautions that investors should
take a tactical approach since market sentiment will likely recover fairly quickly the report
also notes a few bullish and bearish catalysts that could move the market on the bullish front
this would include the Fed ending quantitative tightening or QT this would add to global
liquidity with some of that money finding its way into crypto alternatively an increase
in stimulus from major global economies could also have a similar effect on the bearish front
meanwhile the answer is pretty obvious and that’s a continuation of the uncertainty surrounding
Trump’s tariffs as this could cause global shocks that reduce market liquidity more about
Trump’s tariffs in the description moving on next the report gives a few insights from other major
crypto companies starting with Grayscale a leading crypto asset manager according to Grayscale fees
on application layer blockchains continue to rise while the demand for decentralized applications
or DAPs continues to grow notably there was a huge spike in fees generated by DAPs in late Q4 last
year before falling dramatically next up is Tera Digital a digital assets investment company
which looks at the restricted BTC exposure across major brokerages such as Fidelity Vanguard
Morgan Stanley JP Morgan and Goldman Sachs among others according to them many brokerages restrict
their clients from being exposed to Bitcoin ETFs but if they allow for even a 2% allocation
to the spot Bitcoin ETFs then this could mean unlocking anywhere between $440 and $765
billion in ETF inflows 22x higher than in 2024 the catch though is that the data for these
estimations is apparently quote based on private conversations with advisers at each brokerage i
guess we’ll just have to take their word for it next Multicoin a cryptofocused investment
firm points out that in Q1 of this year Salana generated more revenue than all other layer 1
or layer 2 blockchains combined even after the meltdown of the Salana memecoin narrative note
that Multicoin is a big investor in Soul and finally we have A16Z crypto the cryptofocused
branch of venture capital firm Andre Horowits these guys decided to zoom in on the transaction
volume of stable coins after adjustments for inorganic participants like bots when adjusted
stable coin transactions show a clear uptrend reaching an all-time high in Q4 last year which
is expected to continue in 2025 oh and by the way if you’re enjoying the video so far punch that
like button slap that subscribe button and drop kick that notification bell so you don’t miss our
next one now the next part of the report provides a general overview of the crypto market starting
with the market dominance of different cryptos notably Bitcoin’s dominance rose to 63% in Q1
its highest level since early 2021 as the report explains this is because investors have largely
been moving away from riskier assets and moving to BTC as a safe haven within crypto obviously
this is part of why Ethereum’s dominance has been narrowing interestingly the report says that
this has been the case for around 6 months but the chart provided suggests that ETH dominance has
been noticeably declining since around July 2023 meanwhile Salana’s market dominance has remained
fairly stable since around the same time next the report looks at the weekly inflows of the spot
Bitcoin ETFs which have been climbing consistently since they were launched in January last year
the chart provided shows that in total there’s been over $2.5 billion in cumulative inflows
what stands out to us though is the reversal this January where investors were selling out of
the ETFs thanks to yep Trump’s tariff turmoil as for the spot Ethereum ETFs meanwhile you may
recall that these had a rough old time when they were first launched back in August last year
however they saw serious inflows between November and December roughly $800 million worth likely
thanks to excitement around Trump’s election victory however in Q1 this year alone they
also saw roughly $100 million in outflows ouch the report also provides a chart that shows that
as far as spot bitcoin ETF issuers are concerned black rockck is by far the largest holder of BTC
with its IBIT fund as for the spot Ethereum ETFs Black Rockck and Gayscale have roughly equal
amounts of ETH in their respective funds eth A for Black Rockck and ETH E for Grayscale next
the report looks at BTC’s price performance in the current cycle which the authors clarify started
in 2022 what’s strange is that they note that BTC’s current price action was closely correlated
to its performance in the 2015 to 2018 cycle but has apparently diverged since Q1 however from our
perspective the chart strongly suggests that BTC is still following that cycle very closely if this
is indeed the case then this would be insanely bullish for BTC’s price this cycle as the price
action for 2015 to 2018 suggests BTC could still have plenty of room to run yet before reaching the
cycle top although we should caveat that just as is written in the report past performance does not
indicate future returns so take it with a grain of salt the report then moves to ETH’s current
performance relative to previous cycles which is where things become far more apparent notably ETH
has been tracking its own price action from the 2018 to 2022 cycle but has clearly decoupled from
this price movement and is now moving down and to the right to be blunt this doesn’t paint a very
positive picture especially when you factor in diminishing returns which would suggest that ETH
is heading well down only from here the caveat is that we believe that momentum behind ETH could
be building and could surprise everyone to the upside in the near future and you can learn more
about why ETH could be long-term bullish in this video right over here anyhow the report then
turns to stable coins what’s crazy is that in the two charts provided you can clearly see that
USDT has the largest supply by a long shot but the majority of stable coin volume is actually
in USDC this suggests that DeFi is seeing some serious activity since USDC is primarily used
in things like borrowing and lending protocols and also swapping then the report looks at the
correlation between crypto and other major asset classes it explains that crypto’s correlation
with stocks rose in Q1 but has displayed low or even negative correlations with other assets for
example BTC’s correlation to gold is just 0.05 which is incredibly low keep in mind that a full
correlation would be a score of one well hello there i know you’re enjoying the video immensely
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Coin Bureau deals page in the description below and now back to the video the next part of the
report looks at what’s happening on chain first it shows something called the entity adjusted
nupil which takes the net unrealized profits and losses and then removes any transactions between
accounts belonging to the same entity this gives us an idea of market sentiment the report notes
that in Q1 BTC moved from denial to anxiety a bit like me when I consider going to the gym
anyway next the report looks at the percentage of BTC’s held supply that’s in profit what’s crazy
is that almost every BTC holder was in profit at the start of the year but by the end of Q1 more
than a quarter of BTC holders were actually down on their investment then the report looks at BTC’s
liquid and illquid supply where liquid means BTC that was moved within the last 3 months btc’s
liquid supply decreased in Q1 which suggests that investors accumulated more BTC when its price fell
below $90,000 in February the report then looks at BTC’s realized price and MVRV which requires a
little explaining so the realized price is the average price of BTC based on its value on the
day each coin was last transacted with onchain meanwhile the MVRV ratio which stands for
market value to realized value measures the average unrealized profits and losses of Bitcoin
investors as the report explains an MV value of two means that the average BTC holder is up by 2x
meanwhile an MVRV value of 1 means that investors are breaking even and an MVRV of85 means that the
average investor is 15% down notably the average realized price of BTC is somewhere around $45,000
and the majority of investors are up nearly 2x meanwhile the report notes that throughout Q1 the
total supply of BTC in a loss went from fewer than 500,000 to over 4 million BTC okay the next part
of the report switches from Bitcoin to Ethereum starting with ETH’s nal which you’ll recall
stands for net unrealized profits or loss the report explains that throughout Q1 ETH moved into
a capitulation stage and when it comes to labels for market sentiment capitulation is the lowest
end of the scale anyhow the report then looks at how much of ETH’s supply is sitting at a profit
notably more than 90% of ETH holders were in profit at the start of the year but thanks to the
recent sell-off this number dropped to just 45% next the report examines ETH’s liquid supply which
rose by 15% in Q1 of this year meanwhile ETH’s illliquid supply fell by 2% this means investors
who have had long-term positions in ETH have been feeling extreme FUD and have begun moving their
ETH positions around either for staking to earn a yield or to exchanges to sell more evidence of
capitulation the report then looks at Ethereum’s MVRV which you’ll recall stands for market value
to realize value the report points out that quote ETH’s MVRV turned negative in Q1 for the first
time in 2 years this means that ETH investors are sitting at a loss on their positions relative
to what they paid on the market albeit only just the report then looks at the total supply of ETH
sitting in loss notably it highlights that by the end of Q1 more than 40 million ETH were sitting
in loss but something even more noticeable is seen on the chart provided that’s because this
chart clearly shows that shortly after January roughly 5 million ETH were sitting in loss this
amount then skyrocketed to over 40 million all in the space of a few weeks crazy stuff next up
the report looks at Ethereum’s layer 2 ecosystem the chart provided shows that there were around
14 million transactions across Ethereum and its layer 2 protocols at the end of Q1 this year
the chart also shows that Ethereum transactions reached a peak of 18 million somewhere around Q3
of last year the chart also shows that the vast majority of transactions were done using Bass you
might also notice that Arbitum and Tao supported a good chunk of Ethereum transactions while Ethereum
itself facilitated just a small fraction of the overall total then the report shows the monthly
user fees across Ethereum and its layer 2 we couldn’t help but notice that the labels on the
bottom of the chart are positioned incorrectly which makes things a little confusing we’ve
added the correct months to make things a little easier anyhow we can clearly see that Ethereum
transactions spiked in a big way back in May 2023 where user fees amounted to more than 250,000 ETH
it’s also clear that user fees have been ramping down in a big way since December 2024 specifically
these fees fell from roughly 70,000 ETH to roughly 20,000 ETH damn the report then looks at the total
amount of ETH being staked and the value of that staked ETH by the end of Q1 there were roughly 34
million staked ETH which was worth just under $15 billion what’s crazy is that there was actually
an uptick in the amount of ETH being staked since the start of the year despite ETH’s price falling
by more than 50% the report then shows the annual staking yield for ETH which you’ll notice has been
curving downwards since 2021 in fact ETH’s annual staking yield was around 14% in January 2021
which made staking ETH very lucrative however by January 2025 that yield had fallen to about
4% doesn’t really offer the same appeal does it in fact this is largely the reason why Ethereum
has struggled to capture the attention of venture capitalists and institutional investors that’s
simply because these whales can just as easily earn a yield of 4.5% by holding US Treasury
bonds aka US government debt which is widely considered to be the safest investment out there
meanwhile ETH’s value could easily depreciate in addition to delivering a lower yield and finally
the report ends by looking at the total value of ETH locked away in DeFi protocols using a 7-day
moving average notably the report specifies that this includes ETH stable coins and altcoins locked
in Ethereum smart contracts or in Ethereum based DAPs the chart provided shows that the total
value locked or TVL on Ethereum was roughly $45 billion at the end of Q1 with more than 25
million ETH locked in DeFi protocols although it is hard to get a clear idea of exactly how
much ETH since the chart is labeled incorrectly 25 million appears twice anyway you’ll also notice
that the TVL in Ethereum’s DeFi ecosystem has been rising gradually since January 2024 although this
figure has dropped a lot since the start of this year and with that we’ve reached the end of the
report and we’ll remind you that you can find the full thing down in the description below for now
though there’s just one question remaining what does all of this mean for the crypto market
well if this report is anything to go by the rest of 2025 could be a bumpy ride on the one hand
crypto seems to be in a transitional phase bitcoin dominance continues to rise etf inflows have
been holding steady and long-term hodlers are doubling down on every dip despite all the wider
market uncertainty this suggests that investor confidence in BTC is still very much intact on
the other hand though ETH continues to struggle staking yields remain unattractive and the massive
shift of ETH into loss territory doesn’t exactly inspire confidence even when you consider how DeFi
activity on Ethereum continues to rise despite the negative sentiment around Ethereum itself if you
watched our recent video on crypto lending you’ll know that DeFi activity has made a strong recovery
since the bare market which could seriously support ETH’s price and the broader altcoin
market by extension and you can learn more about the borrowing and lending sector in the video
right over here what’s more is that Ethereum’s upcoming Pectra upgrade which is set to go live
on the 7th of May could be a major catalyst for ETH’s potential recovery that’s because PETRA
will introduce 11 Ethereum improvement proposals or EIPs that will improve its scalability through
layer 2 while introducing a bunch of muchneeded improvements to Ethereum’s user experience or UX
and you can learn more about Pectra by checking out the video right over here as such we believe
ETH could take many investors by surprise and this would massively improve the sentiment around
altcoins as a whole combine this with a regulatory backdrop that’s becoming increasingly bullish and
you realize that the altcoin season we’ve all been so desperately waiting for could manifest itself
in some way or another of course though this ultimately depends on macro conditions which
could potentially be more bullish than many are expecting that’s because the recent market
volatility caused by Trump’s tariffs has resulted in the Federal Reserve effectively
confirming that it would stabilize the bond market through quantitative easing or QE if
deemed necessary this would seriously support liquidity conditions in the market not only that
but the Fed’s most recent interest rate forecast note that it plans to lower rates by the end of
the year if inflation rates come in lower than expected and the economy continues to struggle
with uncertainty the Fed could opt to put this plan into action much sooner ironically the Fed’s
next policy meeting is also on the 7th of May the same day that PCRA goes live so if the Fed is
more dovish than expected then make no mistake this could cause cryptos everywhere to pump so
mark your calendars folks because the crypto market could be at a pivotal moment okay if you
enjoyed that video you know what to do hit up that like button smash that subscribe button and
turn on those notifications too so you don’t miss our next one if you want to learn more about the
potential catalysts that could pump the crypto market then you can check out this video right
over here and if you want to learn more about how institutional investors are eyeing up crypto
then this video right over here has you covered thank you all for watching and I’ll see
you in the next one this is Guy signing off
