This document provides an overview and outlook of the cryptocurrency market in 2020 and 2021. In 2020, bitcoin saw increased correlation with global stock indices and gold initially, but correlation decreased later in the year. Institutional adoption grew substantially in 2020, with large transactions over $100k quadrupling. Looking to 2021, the author expects institutions to remain involved while retail interest may still be skeptical. Macroeconomic factors like global debt and inflation concerns are likely to continue impacting cryptocurrency prices. The author also announces a new macro insights service to provide holistic comparisons of crypto and traditional capital market performance, correlations, and risks.

1. A Data-First
Perspective of
Crypto vs
Capital Markets

2. Agenda
❖ 2020 Overview
❖ Driving Forces
➢ Macro
➢ On-Chain
➢ Derivatives
❖ 2021 Outlook
2

3. IntoTheBlock Update: Resources

4. IntoTheBlock Update: DeFi Report
▸ Introduction to DeFi
▸ Assessing DeFi’s Growth & Risks
▸ Deep dive into lending and DEXes
▸ Road ahead

5. IntoTheBlock Update: CMC Bitcoin $20K
▸ Bitcoin overview
▸ Preview of macro indicators

6. 1
Crypto 2020
Overview
6

7. Bitcoin & Global Indices

8. Bitcoin & Global Indices
Source: Tradingview
▸ Correlation vs. American indices peaked in March, bottomed in November
▸ Correlation vs. Shanghai Composite peaked in November, bottomed in Feb
▸ Increasing correlation vs. Shanghai Composite, decreasing vs. rest of
global indices

9. Bitcoin & Precious Metals

10. Bitcoin, Precious Metals & the US Dollar
▸ Bitcoin recorded the highest historical correlation with gold in August
▸ Precious metals and Bitcoin diverged in October and November
▸ Gold records highest ever outflows; Bitcoin highest inflows
Source: Tradingview

11. Bitcoin & FAANG Stocks

12. 1212
Large Cap Crypto Performance
Crypto-asset
2020
Return
Bitcoin 160%
Ethereum 205%
Ripple 190%
Bitcoin Cash 15%
Litecoin 85%
Chainlink 235%
Source: IntoTheBlock

13. Driving Forces

14. Macro Perspective
▸ Iran tensions → Bitcoin safe haven narrative
▸ COVID-19…
▸ Markets crashed
▸ Recession
14

15. 1515
Fed to the Rescue
▸ $2.3 Trillion relief package
▸ $1,200 stimulus
▹ Coinbase deposits of $1,200 quadruple
▸ Purchases of corporate debt, junk bonds
▸ Markets push to new highs
Source: R/Wall Street Bets

16. 1616
Macro Perspective
▸ US dollar supply reaches all-time highs
▸ Has not led to inflation yet
Source: Federal Reserve Bank

17. 1717
Macro Perspective
▸ Debt is worryingly high
▸ USD dropped to lows
▸ Increased demand to hedge
▸ Bitcoin’s proposition as store
of value gains strength
Source: Financial Times

18. Catalyst for Digitalization
“Gradually then suddenly”
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19. Catalyst for Institutional Adoption
▸ Digital gold narrative poses asymmetric upside for Bitcoin
▸ Fidelity, Blackrock, Square, PayPal, MicroStrategy
▸ Paul Tudor Jones, Stanley Druckenmiller
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Source: Ycharts

20. 2020
On-Chain: Institutional Activity
▸ Volume in transactions over $100k quadruples
▸ Trend accelerates in the fall

21. 2121
On-Chain: Bitcoin Cycles
▸ Record holders of 1Y+ ▸ Cycle restarts ▸ Short-term interest renews

22. 2222
Growth in Active Addresses
▸ DAAs surpass 1 million
▸ Growth prior to prices breaking out

23. 2323
Derivatives
▸ Options OI 10x ▸ Perpetual swaps ~ 3x

24. 3
2021 Outlook
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25. 2525
Crypto 2021 Outlook
▸ Institutions are here; retail still in disbelief
▸ Likely to have another bubble phase
▸ Development and uncorrelation of sectors within crypto
Source: Google Trends

26. 26
Crypto 2021 Outlook
▸ Macro factors to continue impacting crypto
▹ Global debt
▹ Inflation fears
▹ Rising inequality
▸ Risk & opportunity for crypto markets and protocols
▸ Watch out for:
▹ S&P Dow Jones Crypto Indexes
▹ Stable Act
▹ Crypto scams likely to grow along with the market

27. 27
Announcing ITB Macro Insights
▸ Holistic overview of crypto vs. capital markets
▸ Potential indicators:
▹ Performance vs Stocks, Commodities, Indices & ETFs
▹ Correlations and volatility comparisons
▹ Risk-Reward ratios (sharpe, sortino)
▹ Crypto in context of traditional sectors and industries
▹ Any indicators you’d like to see?

28. 2828

29. INTRODUCING
CONTACT INFORMATION
Lucas Outumuro
Senior Analyst
Twitter: @LucasOutumuro
Email: loutumuro@intotheblock.io
Thank you! Do you have any
Questions/Feedback?