Bitcoin Price Surged 1,000% in Past Year, Ethereum Up Over 1600% Since Mar 2020 Crash, Stablecoins Flourishing: Report

Nate Maddrey and the Coin Metrics Team note that on March 12, 2020, amid the growing panic over the rapid spread of the Coronavirus, the Bitcoin (BTC) price had crashed from around $8,000 to below $4,000 during just a 24-hour timeframe.

Predictably, the rest of the crypto-asset market came crashing down with the flagship cryptocurrency. Now, just about a year later, the Coin Metrics team has taken a detailed look back at how everything has drastically changed since that “notorious” day.

Coin Metrics points out that while the price drop might have appeared to be “cataclysmic” at that time, in “hindsight” it was a major opportunity to strategically invest in Bitcoin and other digital assets at a highly discounted price.

Coin Metrics noted that as crypto-asset prices crashed on March 12th, the market value to realized value (MVRV) ratio fell to 0.88. As explained by the researchers, the MVRV is determined by dividing BTC’s market cap by its “realized” capitalization. As noted in the update,  “historically, the periods that MVRV has dropped below 1.0 have been some of the best times to invest in BTC.”

The report further noted that this particular indicator “held true” for the March 12, 2020 martk crash. The Bitcoin price closed at $4,959 on March 12, 2020, Coin Metrics confirmed, while noting that on March 12, 2021, it closed at $57,335, which is notably a gain of more than 10x (1,000%).

In a somewhat similar fashion, Ethereum (ETH) had remarkable growth during the past year as well. ETH “closed at $110 on March 12th, 2020 and $1,768 on March 12th, 2021, a gain of over 16x (1,600%),” the report noted.

The Coin Metrics team also mentioned:

“User adoption has also grown significantly over the past year…. ETH addresses have seen a 55% increase, from 2.52M to 3.90M, compared to 11% from 5.98M to 6.65M for BTC.”

However, the large Bitcoin addresses grew “faster than large ETH addresses,” the report revealed. In fact, the number of addresses “holding at least 0.01% of total supply” has grown considerably.

The report further noted that large BTC addresses “started increasing soon after the crash, with a big jump up in November, December, and January.” According to Coin Metrics’ analysis, this is “likely due to the big increase in institutional investors throughout the year.” The report pointed out that Bitcoin addresses with “at least 0.01% of supply went from 993 on March 12, 2020 to 1,057 a year later, and peaked at 1,243 on December 27th, 2020.”

The report continued:

“BTC large addresses dropped dramatically at the end of December 2020. This is likely due to an exchange (or several exchanges) consolidating and shuffling addresses, but the exact cause is unknown.”

The report further noted:

“Unlike BTC, large ETH addresses decreased immediately following the crash and remained down for most of the year. But they started increasing in 2021, potentially a sign of incoming institutional investors. As of March 12th, 2021 there are 1,066 ETH addresses with at least 0.01% of supply, an 8% growth from 983 on March 2020.”

Stablecoins have also seen impressive growth since the March 2020 crash. At first, stablecoins, which are currencies pegged to real world assets like gold or major currencies, were most likely used to hold funds “on the sidelines amidst the market volatility,” the Coin Metrics report noted.

The report added:

“Following BTC’s drop many rushed into the relative safety that stablecoins provide. But since then, stablecoin use cases have flourished. Stablecoins are now used extensively in decentralized finance (DeFi) and are increasingly being used to move money around the world. Stablecoins are also used for trading, where they’re used to move in and out of other cryptoassets.”