• The amount of Bitcoin and Ether owned by hodlers continues to hit record highs.
• Cryptocurrencies performed significantly better than other asset classes in the first quarter.
• Bitcoin and Ethereum have realized their largest quarterly price gains since Q1 2021.
Crypto Market Performance in Q1
The start of 2021 saw a significant increase in the market capitalization of the two biggest cryptocurrencies, Bitcoin and Ethereum. According to IntotheBlock’s latest newsletter shared with CryptoPotato, both digital assets recorded their largest quarterly price gains since Q1 2021. Bitcoin’s market cap increased by 20% in March alone, and 70% for the entire first quarter; Ethereum followed a similar trend with a 9% monthly and 49% quarterly surge in market cap. Tether, the world’s largest stablecoin, also kicked off the year on an impressive note with a 12% monthly and 20% quarterly change in market cap.
Correlation between BTC & Gold
The report highlighted that Bitcoin’s outperformance was likely indicative of its growing appeal as a digital store of value, as evidenced by its correlation with gold prices increasing from -0.3 at the beginning of the year to 0.9 closing out the quarter. This suggests that investors are increasingly viewing bitcoin as a safe-haven asset when compared to traditional investments like stocks or gold.
High Demand for Stablecoins
The demand for stablecoins has been driven by several factors this quarter such as banking sector uncertainties which led many investors to switch from Circle-backed USDC to Tether – resulting in an increase in its market cap for both monthly and quarterly periods. Similarly, MakerDAO experienced an 80% increase compared to December 2020 due to high demand for decentralized finance applications (DeFi).
Hodler Confidence Increasing
As selling exhausted since the collapse of FTX, hodler confidence has continued to rise steadily over time, pushing up crypto holdings across all exchanges worldwide – reaching an all-time high last month according to IntoTheBlock’s analysis using Exchange Flow metrics . These metrics measure how much capital is entering or exiting exchanges on any given day – providing insights into investor sentiment towards different crypto assets over time.
Overall it appears that cryptocurrencies have performed significantly better than other asset classes during Q1 2021 thanks largely due to renewed investor interest and confidence in digital assets as stores of value; this is evidenced by increased demand for stablecoins and higher levels of hodling activity across all major exchanges worldwide throughout this period