BGB Sail: February Edition
The focus of our BGB Sail Series is on the monthly performance of BGB, with a recap of the market situation at the end of each month.
Bitget Annual Briefing 2022-23 can be found here: Part 1 / Part 2 / Part 3.
Market Summary
Data from CryptoQuant shows that since the new year, Bitcoin open interest on all exchanges has been going up bit by bit, especially after the flagship cryptocurrency breached the US$20,000 mark for the first time since FTX/Alameda.
Source: CryptoQuant
That also implies more liquidity and attention into the space, but there is still a long way until participation hits the average level of 2022 again.
In terms of spot trading, Bitcoin daily volume has returned to last year’s average by the end of February/early March 2023. It has actually been staying firm above that line for most of 2023’s first 60 days, showing a much better start compared to Jan-Feb 2022.
Source: Kaiko Analytics
If we take a closer look, BTC spot volume was extremely volatile in 2022 even for Q1 (after BTC reached its all-time high at nearly US$70,000) and likely to soar when there was an ugly incident (Terra (LUNA)/May, 3AC/June, post-Ethereum Merge/September-October, FTX/November). As a result, the consistent upward trend observed here is a positive signal for the market.
Source: Kaiko Analytics
However, the liquidity issue still needs to be addressed. BTC 2% market depth, meaning the quantity of bids and asks within 2% of the mid-price for BTC/USD and BTC/USDT pairs, remains way below the November levels. The higher this figure is, the smaller impact large orders have on Bitcoin prices across markets.
The situation could be exacerbated by the tightening policies of the U.S. and Korean governments towards cryptocurrencies. In South Korea, the Financial Service Commission has published the latest guideline on digital financial innovation, whose main purpose is to define ‘security token’. Those who do not fall under this definition will have to comply with an upcoming digital asset framework that is to be passed by early next year.
Meanwhile, U.S. authorities pay more attention to stablecoins and staking programs. Paxos is no longer issuing BinanceUSD (BUSD) by the order of the New York Department of Financial Services. The main concern here is that while Paxos-issued BUSD is regulated and audited on a regular basis, its BEP-20 standard twin is not. On the other hand, the US-based exchange Kraken had to pay US$30 million to the SEC over the ‘unregistered offer and sale of crypto asset staking-as-a-service program’ as part of the stricter crypto custody rules proposed by the agency. The SEC Chair further expressed his aggressive view on crypto by saying ‘everything other than bitcoin is a security’. In the already unclear crypto environment in the U.S., this will most likely drive more innovation companies away.
BGB Performance in February
BGB was one of the rare tokens to have recorded its all-time high in Q4 2022 at US$0.23880 on October 21. But fast forward to February 2023 and it constantly accomplished new, amazing achievements: four consecutive weeks of new highs from US$0.22185 (January 23 - January 29), US$0.22455 (January 30 - February 05), US$0.39616 (February 06 - February 12) and US$0.51620 (February 13 - February 19).
Source: TradingView
In less than a month, its value doubled with a persisted sense of accumulation. The last week of January already suggests accumulation levels equal to October 21, 2022, and even after some cooling off at the end of February, BGB is once again in an accumulation zone for March.
Unsurprisingly, BGB has come into the spotlight as the star performer of the month. For 20 days of February, BGB cumulative return came in at over 1 - which translates to an un-ending rally in the entire period.
Investors naturally came rushing in to stack up their BGB bags, which drove its monthly volume up by 2.25 times (remember that there were only 28 days in February when it was 31 in January). The demand is enormous!
You can find a detailed introduction of BGB here, but first take a quick look at this summary below:
And check out our monthly report to see how BGB has made its way to the top:
Bitget-Verse
An explanation for BGB’s impressive rise may lie in the fact that Bitget has been growing faster than ever. The collapse of FTX leaves many traders and investors without a reliable exchange, which actually provides Bitget with a great opportunity to strengthen our leading position in the market. We have already produced our Proof-Of-Reserve and thereby boosted users’ confidence in centralised exchanges (CEXs) on the debris of FTX last year.
Not only that, Bitget has been one of the keenest builders in the space. We were the first to announce our US$300 million Bitget Protection Fund way back in August 2022 to ensure a safe trading experience for users, the first to launch the US$5 million Bitget Builders Fund for FTX victims and the 1 million Lira in relief funds to Turkish earthquake victims.
Always the first to respond, it’s no surprise that Bitget is growing at breakneck speed and securing more and more market share. The state of CEXs sector is discussed here: Bitget Annual Briefing 2022-23 (Part 3).
Spot Futures Activities
Futures activities, represented by the aggregated volume of all contracts, saw a minor increase of 2%. Bitcoin continued to dominate the futures markets, averaging at 67% of the total open interest for February. We have now fully integrated TradingView on our platform to make trading even more convenient for our users (full guide available here).
Meanwhile, the comeback of Bitget Innovation Zone results in a 7% increase in average spot volume, with the highest 24-hour spot volume capped at over US$200 million. To make trading spot easier to approach, we have launched the brand new Bitget Spot Copy Trading, first on the Bitget App for Android devices!
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