History In The Making?

March 2021 Market Recap & Outlook

ORDO AB CRYPTO
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March 2021 Takeaways

• BTC finished Mar. up +30%, which marked a sixth consecutive month of double-digit, positive returns. With Apr.
being, on average, the second best performing month, one could expect BTC to finish higher and thus tie for the
longest winning streak since BTC’s inception.

• Further interest and excitement surrounding NFTs attracted considerable attention from new and existing market
participants, thereby driving the broader NFT space +285% higher in Mar. Of the 10 largest NFT coins by market cap,
Mar.’s average and median returns were +404% and +343%, respectively. Aggregate daily transaction volume across
the largest NFT marketplaces also hit an all-time high of $34M on Mar. 11.

• Corporate adoption, institutional adoption, the passing of a $1.9T COVID-19 relief package in the U.S., and several
BTC ETF filings were among the major headlines in Mar. that helped lift BTC and the broader crypto market higher.
• Historical data indicates that 2Q is typically a positive yielding quarter for both BTC and ETH; since 2011, BTC has returned,
on average, +256% in 2Q while ETH has returned, on average, +141% when looking as far back as 2016.
• When plotting logarithmic regression lines against ETH’s historical price action, one will find that ETH’s next big level of
resistance resides around $2,700. Furthermore, one can identify various levels where ETH could top out this market cycle.
For instance, a move up to the logarithmic regression line that coincides with ETH’s previous market cycle top would imply a
$15,238 Ether.
• The current trend in BTC’s bull market support, the 20W EMA and the 21W SMA, suggests that one could expect BTC’s bull
market support to reside around $44,165 and $48,702 come May 1. At a month-end price of $58,786, this would mean that a
retrace down to said support would go from -29% to -36% to roughly -17% to -25%.

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Bitcoin (BTC) - Monthly Recap

• Despite setting a new all-time high of $61,725 and subsequently correcting -18.5%, BTC finished Mar. +30% higher and
secured a sixth consecutive month of positive returns.

• BTC’s steady uptrend resulted in volatility falling nearly -40 percentage points MoM and finishing the month at 63%, a near
3-month low. The lack of market volatility resulted in trading volumes falling -5% and hitting a YTD low of roughly $255B.

• Mar.’s annualized velocity of 9.43x came in well below Feb.’s reading of 10.9x and marked a 4-year low. The slump in
velocity tells us that network activity was relatively timid and failed to keep pace with BTC’s appreciation.

sources: Kraken Intelligence, CoinMetrics

notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp, Coinbase, Gemini, Poloniex
annualized velocity = (monthly transaction volume (USD) ÷ average market capitalization) x 12 3
annualized volatility = 30 day std. deviation * SQRT(365)
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Ethereum (ETH) - Monthly Recap

• After a relatively underwhelming +9% return in Feb., ETH outperformed BTC with a noteworthy +35% return in Mar. Unlike
BTC, ETH failed to secure a new all-time high and fell short of surpassing the psychologically significant $2,000 level.

• Mar. marked a third consecutive month of declining market volatility and trading volumes; the month concluded with both
hitting a YTD low and falling -23 percentage points and -31% MoM, respectively.

• Earlier in the month, Vitalik Buterin said that layer-two rollups solutions could scale Ethereum’s network by 100x “in the
next few months.” News also broke that EIP-1559 is officially set for July’s London hard fork; the EIP means that ETH’s
inflation could potentially hit 0% or even turn negative.

sources: Kraken Intelligence, CoinMetrics, Tim Ferris Podcast, Twitter

notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp, Coinbase, Gemini, Poloniex 4
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Polkadot (DOT) - Monthly Recap

• Although trading off as much as -21% intra-month, DOT was able to finish Mar. +9% higher. DOT’s month-end reading of $37.06 put the
fifth largest cryptoasset above its 50-day moving average of $33.85, which suggests that DOT’s recent weakness marks a bottom in
what was a -34% correction from its all-time high of $42.23 set on Feb. 20.

• On Mar. 25, Polkadot announced the launch of parachain auctions and crowd loans on Rococo, Polkadot’s testnet specifically designed
for parachains and their related technologies. That same day, Acala stated that it won the first parachain slot auction on Rococo.

• On Mar. 27, Plasm Network announced that it had won the 2nd Parachain slot auction on Polkadot’s testnet. On Mar. 29, KILT Protocol
became the third-ever project to win a parachain slot auction on Rococo 

sources: Kraken Intelligence, CoinMetrics, Polkadot

notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp, Coinbase, Gemini, Poloniex 5
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Cardano (ADA) - Monthly Recap

• ADA’s inability to retain its +25% intra-month rally to an all-time high of $1.48 resulted in ADA subsequently correcting
-20% and finishing Mar. down -9%.

• On Mar. 31, IOHK, the parent company behind Cardano, announced that Cardano block production is officially
decentralized with the full responsibility of block production in the hands of more than 2,000 community stake pools.

• As of month-end, approximately 72% of all ADA in circulation was staked among roughly 387,000 unique delegation
addresses.

sources: Kraken Intelligence, CoinMetrics, IOHK, Staking Rewards

notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp, Coinbase, Gemini, Poloniex 6
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Uniswap (UNI) - Monthly Recap

• On Mar. 5, UNI broke into the top 10 cryptoassets after amassing a market capitalization in excess of $14B, making it
the very first DeFi DApp token to join the ranks of the largest cryptoassets.

• Uniswap Labs took to Twitter on Mar. 23 to present a detailed overview of Uniswap V3 and announce a May 5 mainnet
launch. According to the tweet, “a scalable Optimism L2 deployment is set to follow soon after.” UNI hit an all-time
high of $37.14 following the announcement.

• As of month-end, UNI stood as the fourth largest DeFi DApp with a total value locked (TVL) of $4.46B, an all-time high.

sources: Kraken Intelligence,CoinMetrics, Uniswap Labs, DeFi Pulse

notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp, Coinbase, Gemini, Poloniex 7
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Theta (THETA) - Monthly Recap

• THETA joined the top 10 cryptoassets by market cap on Mar. 23 after news broke that Sierra Ventures, Heuristic Capital, Venture
Reality Fund, and GFR Fund had collectively staked over $100M in THETA to a collective Enterprise Validator Node.

• Earlier in the month, Theta Network launched in Japan with its LINE Blockchain THETA.tv app. The launch is part of a partnership
with LINE, one of the most popular Japanese messenger apps with more than 167M monthly active users in key markets.

• On Mar. 25, Theta Labs announced that the Theta Mainnet 3.0 is being moved from Apr. 21 to Jun. 30 “to ensure the edge
network functions efficiently as it scales to 100K+ Elite Edge Nodes and to incorporate some building blocks for our longer-term
NFT vision.”

sources: Kraken Intelligence, CoinMetrics, Theta Labs

notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp, Coinbase, Gemini, Poloniex 8
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Crypto’s Monthly Performance

• Relative to other crypto verticals, NFTs stood out amongst
the pack in Mar. with an astonishing +285% return and a
risk-adjusted return (Sharpe ratio) of 32.9. NFT’s
outperformance comes off the back of continued
excitement for the crypto innovation and artists, musicians,
actors, celebrities, and corporates capitalizing on the latest
surge in interest.

• THETA, the native token of the decentralized video delivery

network Theta Network, outpaced its peers by a

notes: Sharpe ratio = (monthly return - monthly risk-free rate) / monthly std.
substantial margin after finishing Mar. up nearly +300%.
Year-to-date, THETA is up a whopping +560%.

• After coming in at first place in Feb. with a return of +281%,

ADA was this month’s under performer with a -9% loss.

sources: Kraken Intelligence, Cryptowatch

ADA’s decline can be explained as ADA “cooling off” after
having appreciated more than +550% thus far this year.

• Although the vast majority of cryptoassets and crypto

verticals finished higher in Mar., the average return and
annualized volatility is down -17 and -38 percentage points
MoM, respectively.
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What Happened In NFTs?

sources: Kraken Intelligence, Cryptowatch, DApp Radar, Decrypt, Bloomberg, CoinDesk, CoinTelegraph, ESPN, SuperRare, Dapper Labs, Enjin
• After hitting an all-time high of $26M in Feb., further momentum in
NFTs drove aggregate daily transaction volume across the largest
NFT marketplaces to an all-time high of $34M on Mar. 11 before
concluding the month at $13M.

notes: Marketplaces include NBA Top Shot, OpenSea, CryptoPunks, Rarible, Sorare, SuperRare.co, Axie Infinity
• Some of the more notable market moving headlines included an
original artwork by iconic British street artist Banksy being burned
and transformed into an NFT, the Kings of Leon becoming the first
band to release an album as an NFT, Justin Sun purchasing Jack
Dorsey’s first tweet for $500K, digital artist Beeple selling an NFT
for $69M via legacy auction house Christie’s, NFL star Rob
Gronkowski and Patrick Mahomes selling limited edition NFTs, and
multi-million dollar capital raises by SuperRare, Dapper Labs, and
Enjin.

• Of the 10 largest NFT coins by market cap, Mar.’s average and

median return was +404% and +343%, respectively. The month’s
out performer was Chiliz with a monthly return of +887%.

• The rapid appreciation of NFT coins and jump in daily transaction

volume across the largest NFT marketplaces speaks to the current
excitement surrounding the vertical. Whether the momentum can
persist into and through Apr. is unclear. However, if there is
anything that we can learn from “DeFi Summer,” it’s that a
“healthy correction” can often set the stage for the next leg
higher. 10
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What Happened In DeFi?

• Mar. was a relatively underwhelming month for DeFi, but total value locked
(TVL) across the largest DeFi platforms hit an all-time high of $46.4B on Mar. 13.

• Of the 9 largest projects by TVL, the average and median monthly return was
+26% and +9%, respectively. Curve was the top performer with a gain of +77%.

• On Mar. 1, Compound released the prototype for Gateway. Per the

sources: Kraken Intelligence, Cryptowatch, DeFiStation, Compound, MakerDao, Aave, Balancer, Uniswap
announcement, “Gateway is a cross-chain interest rate market that allows you
to borrow assets native to one chain, with collateral from another chain.”

• On Mar. 9, the MakerDAO community posted a proposal for an

Optimistic DAI Bridge to act as a decentralized off-ramp for Optimistic rollups.
The DAI bridge will at first share the same 1-week waiting period to take funds
out of the Optimistic L2, though instant withdrawals is scheduled for 3Q.

notes: Sharpe ratio = (monthly return - monthly risk-free rate) / monthly std.
• On Mar. 16, Aave released new AMM liquidity pools that allows users to provide
liquidity on Uniswap and Balancer by depositing their LP tokens as collateral to
generate loans.

• On Mar. 23, Balancer announced a partnership with Gauntlet. According to

release, “This partnership will make available long-awaited dynamic-fee AMM
pools to Balancer liquidity providers (LPs). This will come at no extra cost and
with no strings attached for LPs. All funds will remain fully non-custodial and
Gauntlet will not be able to access or move them in any way.”

• On Mar. 24, details surrounding the May 5 release of Uniswap V3 were shared
on Twitter. One of the most notable changes is the addition of concentrated
liquidity pools. These pools will allow LPs to set custom ranges for their
contributed assets to be used to facilitate swaps and has the potential to do
away with impermanent loss risks while also increasing capital efficiency.

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What Happened In Crypto?

A. Mar. 1: MicroStrategy buys $15M of BTC, Japanese e-commerce giant Rakuten enables support
for crypto purchases, CBOE files with the SEC to list shares of VanEck's BTC ETF, Goldman Sachs
says it’s launching a crypto trading desk.
B. Mar 5: MicroStrategy buys $10M of BTC.
C. Mar. 6: The U.S. Senate passes President Biden’s $1.9T COVID-19 relief package.
D. Mar. 7: Publicly-listed selfie app Meitu buys $40M worth of BTC and ETH.
J. K. P.
E. Mar. 8: BTC mining firm Argo Blockchain purchases 320 acres of land in Texas for a 200MW data H.I. L. O.
center; PayPal purchases digital asset security firm Curv. G. M.
F. Mar. 9: JPMorgan regulatory filings reveal a 'basket' product tied to crypto-linked public F.
companies, Norwegian oil billionaire Kjell Rokee purchases $58M worth of BTC. N.
E.
G. Mar. 10: DCG says they will buy $250M of GBTC shares, the percentage of BTC's supply on D.
exchanges hits a 37-month low of ~13%, and the U.S. House approves a $1.9T relief bill. A. C.
B.
H. Mar. 11: WisdomTree files for a BTC ETF, cryptoasset manager CoinShares goes public in Sweden.
I. Mar. 12: MicroStrategy buys $15M worth of BTC, Binance is probed by the CFTC.
J. Mar. 17: Federal Reserve leaves rates unchanged and upgrades its unemployment and inflation
outlook, Meitu buys another $49M worth of ETH and BTC, Morgan Stanley becomes the first
investment bank to offer clients access to BTC funds, Howard Marks changes his mind on BTC.
K. Mar. 19: Brazil becomes the first LatAm country to get its first BTC ETF, FATF releases public
consultation for its updated draft guidance on a risk-based approach to virtual assets and VASPs.
L. Mar. 22: Fed’s Powell says BTC is more of a substitute for gold than the U.S. dollar.
M. Mar. 24: Tesla announces support for BTC payments, Fidelity files with the SEC for a BTC ETF,
news surfaces that Goldman Sachs applied with the SEC for a BTC-related investment product.
N. Mar. 25: CBOE says it could re-list BTC futures, KiwiSaver Growth Strategy (a $350M retirement
plan operated by New Zealand Wealth Funds Management) allocates 5% of its assets to BTC.
O. Mar. 29: Visa announces a pilot with Crypto.com to settle USDC on its network, publicly listed
Mogo announces support for a unique bitcoin cashback rewards program for its MogoMortgage
product, former SEC Chairman Jay Clayton joins One River Asset Management’s advisory board.
P. Mar. 30: PayPal launches its crypto checkout service, Tether releases an assurance report that
shows its stablecoins were fully backed, Dapper Labs raises $305M in a new round of funding.
sources: MicroStrategy, Nasdaq, The Block, Reuters, MicroStrategy, CNBC, Coindesk,
Forbes, CoinTelegraph, Forbes, The Street, Decrypt, Business Insider, The Block,
MicroStrategy, CoinDesk, CNBC, Decrypt, MarketWatch,The Block, Forbes, MarketWatch, 12
Tesla, WSJ, Nasdaq, Yahoo! Finance, CoinDesk, Reuters, Business Wire, Bloomberg,
CoinDesk, Decrypt, Dapper Labs
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What Happened In Traditional Markets?

• United States: The ISM manufacturing survey hit its highest reading since
2008, marking 9 consecutive readings above the key 50 break-even level.
The ISM services survey came in below expectations, but remained in
“expansion” territory (> 50). Unemployment fell -0.1 percentage points to
6.2%. CPI (inflation) rose +0.4%, the Producer Price Index (PPI) gained +0.5%,
NFIB’s Small Business Optimism survey showed a net 34% of businesses plan
to raise prices next quarter, and the National Association of Realtors noted
that the median home price rose +16% YoY. The FOMC met and left rates
unchanged, but revised upward its GDP and inflation forecasts for 2021.

• China: China's financial regulator said that asset bubbles exist in global asset
markets as well as in local property markets, which weighed on equities.
China’s manufacturing index fell for a second consecutive month, but
remained in expansion territory, while its services index sank to a 10-month
low. China’s National People's Congress (NPC) rose its target GDP growth
rate to +6% for 2021 and stated a need to reduce leverage over time.

• Europe: Eurozone retail sales fell -5.9% MoM vs. an estimated decline of
-1.4%. The ECB said it plans to significantly increase the pace of its bond
purchases in the months ahead. A recent global shortage of semiconductors
led the EU to unveil a €150B investment into domestically produced
semiconductors in a bid to make up 20% of global capacity.

• Global Markets: Global equities finished mostly higher thanks to the rollout
of Biden’s $1.9T COVID financial relief bill, increased optimism surrounding
the future growth of the U.S. and European economy, and ongoing
negotiations surrounding Biden’s $2T infrastructure proposal. Global bond
yields also rose on growing concerns of inflation and a greater global
economic outlook as COVID-19 infections dwindled.
sources: Deloitte, Wells Fargo 13
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BTC Correlations
• A rotation out of growth stocks and large cap tech stocks resulted in
BTC’s correlation with the Nasdaq (-0.09) and Tesla (-0.72) turning
negative for the first time since Jan. 2020. This shift showed that
BTC is currently not trending with exposure to large cap tech stocks.

• BTC’s correlation with the S&P 500 (0.80) and Stoxx 600 (0.87) was
little changed MoM. Until stocks retreat from current all-time highs,
it remains unclear whether a broader rotation out of traditional “risk-
on” assets will spill over into BTC. For example, in Sept. 2020, the
S&P 500 entered into a -10% correction after hitting an all-time high
of 3,588, thereby causing BTC to fall -37% in the first week of Sept.

• BTC’s correlation with the U.S. Dollar Index (DXY) strengthened

further in Mar. and finished at a 1-year high of 0.68. The reversal can
be attributed to the U.S. dollar scaling to a near 5-month high and
posting its best month since Nov. 2016 amid higher stimulus-induced
bond yields and upwardly revised forecasts for economic growth.
Should demand for U.S. dollars hold up on lingering expectations of

sources: Kraken Intelligence, IEX, Barrons

a stronger U.S. economy and a long overdue relief rally, BTC could
face near-term headwinds.

• Given that BTC posted its third best 1Q (+103%) in history and gold
faced its worst 1Q (-10%) in 39 years, it comes as no surprise that
BTC’s correlation with gold (-0.83) turned negative yet again. As a
matter of fact, last month’s correlation marked a 52-month low.

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History Says…
• With Mar. being, on average, less volatile than Feb., it came as
no surprise that BTC’s volatility fell -38 percentage points MoM
- the largest MoM decline since Apr. 2020.
• What was unexpected was BTC’s astonishing +30% gain,
especially considering that Mar. is typically the third worst
performing month with an average and median return of +8%
and -6%.
• BTC’s ability to secure a sixth consecutive month of gains
represents the BTC’s longest monthly winning streak since
2013 when BTC posted 7 back-to-back months of gains
between Nov. 2012 and May 2013.
• Considering that Apr. is, on average, 21 percentage points more
volatile than Mar. and is the second best performing month
behind Nov., one could expect a resurgence of market volatility
to influence BTC’s price. When looking at median returns, Apr.
is the best performing month.

sources: Kraken Intelligence

• Mar.’s stellar performance resulted in BTC posting its third best
1Q performance with a return of +103%. Given that BTC’s
market cap was a fraction of today’s market cap back in 1Q11
and 1Q13, last quarter’s performance is arguably one of, if not
the most noteworthy 1Q performances in history.
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History Says… Pt. 2

• When considering the historical 2Q performance for BTC
and ETH, one will find that 2Q is, on average, a positive
yielding quarter.
• With the exception of 2Q18, BTC has always generated a
positive return in 2Q and has an average return of
+256%.
• Similarly, 2Q is just as favorable of a quarter for ETH; so
far, we have yet to see 2Q print a negative return. ETH’s
5-year average 2Q return currently stands at +141%.
• Given BTC’s month end price of $58,786 and assuming
BTC closes +256% higher in 2Q21, one could expect BTC
to trade at roughly $209K as of July 1. Using the median
2Q return of +39.5%, a more appropriate statistical
measure, BTC would stand at approximately $82K.
• Should we see history repeat and ETH advanced +141%

sources: Kraken Intelligence

in 2Q, the price of ETH would be $4,643. Using the
median 2Q return of +71%, this figure would come in at
$3,281.

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Ether You’re Bullish or Bearish

• When plotting logarithmic regression lines against ETH’s historical price action, one can identify various different macro support and resistance
levels that can be of use in both bull and bear market cycles.
• ETH currently resides between Band 4 ($1,462) and Band 5 ($2,695). This tells us that ETH’s next big test of resistance resides around $2,700 and
the bulls will need to keep ETH above $1,462 to prevent price from trending lower in the short-/medium-term.
• While these regression lines will continue to trend higher with each passing day, we can also use these logarithmic regression curves to estimate
where ETH could peak this market cycle. For example, a move up to Band 8, which coincides with ETH’s previous market cycle top, would imply a
$15,238 Ether and a +700% return from Mar.’s closing price of $1,919.
• As ETH continues to trend higher, a close eye should be kept on how price trends upon a test of one of these bands of resistance. Be sure to
subscribe to the OTC Daily to get an updated version of this chart each week.

sources: Kraken Intelligence

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BTC’s Bull Market Support

• BTC’s bull market support consists of two weekly moving averages, the 20W EMA and the 21W SMA. In prior bull
markets, BTC has backtested both levels before trending higher. So far this cycle, BTC has yet to revisit either level.
• If/when BTC backtests these moving averages is unclear. However, what is certain is that both moving averages are
trending higher and thus the severity of a potential correction from BTC’s current price continues to dwindle.
• Since Jan. 1, the 20W EMA and 21W SMA have risen, on average, $1,822 and $1,681 each week, respectively. At the
current pace, one could expect BTC’s bull market support to stand at $48,702 and $44,165 come May 1. At a price of
$58,786, this would mean that a potential bull market correction would drop from -29% to -36% to roughly -17% to -25%.

sources: Kraken Intelligence

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 Data

sources: Kraken Intelligence, CoinMarketCap, CoinMetrics.io

annualized velocity = (30-day transaction volume (USD) ÷ 30-day average market capitalization) x 12
notes: trading volumes summed across Kraken, Bittrex, Binance, Binance Jersey, Binance US, Bitfinex, Bitstamp,
19

Coinbase, EOSfinex, Gemini, Poloniex

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