BGB Sail: September Edition

Bitget Academy is delighted to announce the release of our new BGB Sail Series, which reflects on BGB performance each month alongside the market summary.

BGB Sail: August Edition can be found here.

Market Summary

Whew, the September summary is finally here. Let’s take a trip down the memory lane and reflect on the key moments of the month before moving on with the Ethereum Merge.

Overall, attention from policymakers and authorities for blockchain tech and crypto has increased significantly since the start of this year. Take a look at the chart below, which shows the number of blockchain mentioned in the American Securities and Exchange Commission (SEC) filings over time:

Source: The Block

After two much quieter months of June and July, the number of mentions almost doubled in August. September, again, cooled down a bit, but the related word count still neared 3,000. Even though it’s most likely that regulatory uncertainty in the U.S. will last for some time, we have to say that crypto’s Wild West days are coming to an end, as the Internal Revenue Service (IRS) is making sure that they properly collect cryptocurrency tax. Across the continent, EU officials accelerated the completion of the Markets in Crypto Assets Regulation (MiCA) bill’s final draft in September, which was unanimously passed by the European Council on October 5 and later by the European Parliament Committee on Economic and Monetary Affairs on October 10. The MiCA bill is the first comprehensive regulatory framework for the digital space.

Even without this landmark bill, the month was still a bumpy ride for all traders. The Federal Reserve (FED) remained hawkish after the release of the U.S.’s September CPI data, which shows an 8.3% YoY and 0.1% MoM increase in prices and, once again, raised the interest rates by 0.75%. The decision caused a free fall in the SP500 while the global crypto market cap already lost its US$1 trillion mark after the CPI release. From this perspective, we can expect that crypto markets should have a higher correlation with traditional finance (TradFi). Data from Kaiko confirms this guess:

Source: Kaiko Analytics

Surprisingly, Bitcoin did not only record a new 1-year high for its NASDAQ correlation but also for its correlation with bond markets. A higher correlation means that Bitcoin is more likely to get rekt if the other two do. Talking about NASDAQ, the equity exchange operator was planning a plot to provide crypto custody service for institutional investors but announced in early October that they are waiting for more regulatory clarity and institutional adoption before proceeding with the plan.

Now Ethereum Merge - the most awaited event of September. It’s important to reiterate the importance of this transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) and how they’ve been realised (or will be):

(1) Crypto mining activities are criticised for their high energy consumption (0.4% global electricity use) and deemed not sustainable. Especially after the escalation of tensions between Russia and Western countries, EU member states are preparing for a harsh winter this year, hence the industry may have to stop their activities in Europe when required. Converting to PoS is naturally more eco-friendly (see the plunging below, 99.99% saved!) and less subject to disruptions (due to external factors), meaning better adoption of the industry coming our way.

Source: Ethereum Energy Consumption Index

(2) Gas fees are not significantly reduced after The Merge. Still, the Beacon Chain lays the foundation for the Ethereum Foundation to improve the situation, especially with Sharding. This upgrade breaks down the database into smaller chunks for faster and cheaper transactions. Sharding should be launched in 2023, so until then, Ethereum gas fees are still an entry barrier for many crypto users.

(3) Previously, new Ethereum tokens were created in the form of rewards on both the (former) Mainnet and on the Beacon Chain, which went live in 2020. After The Merge, only Beacon Chain continues to work and issue rewards for validators. However, the only metric that seems to be controlled is the average daily income, not the total daily income:

Source: BeaconScan

The transition occurred seamlessly on September 15, 2022, of course, with the birth of Ethereum fork(s). Data shows that Ethereum forks, new and old, still underperformed the mighty Ethereum.

Source: Arcane Research

More on ETH price and trading activities will be discussed later within the scope of Bitget-Verse.

BGB Performance in September

Despite the eager anticipation of the Ethereum Merge, ETH price saw a 12.43% MoM decrease, equivalent to the highest losses in returns. Staking on the Beacon Chain may be a good idea, but apparently, purchasing or longing ETH prior to the event is not.

September Is A Brilliant Month For BGB

BGB September summary can be described in one word: spectacular. The only one to outperform the others notably. By the month’s end, BGB value had surged by 22.5% cumulatively. The highest value of BGB in September was US$0.200031, up by 15% from August’s high of US$0.173718 (data source: Coingecko).

BGB has been holding itself well amid the bears’ suffering. Analysis of previous months is available here:

BGB Sail: August Edition

BGB Sail: July Edition

BGB Sail: June Edition

BGB Sail: May Edition

Never Too Late To Hold BGB

With the launch of Bitget’s new DeFi product series, BGB becomes strictly a necessity. The more BGB you own, the more you can earn (check out Bitget Launchpool!). If you are a risk-averse user, why not try BGB Earn? Mind you, interest rates may be on the rise, but a strong US-Dollar is hurting all other fiat currencies. For example, the Euro (EUR) has lost ca. 15.9% from January to September, the British pound (GBP) 21.8%, the Japanese Yen (JPY) 26%, etc. Even the Swiss Franc (CHF) has been weakened by roughly 7.6%, whereas the BGB net value increased by 20%! Given that BGB Earn offers a 6% APR, the only question is just how many times your asset value could grow if you are a BGB holder?

Bitget-Verse

Exciting month for BGB, exciting month for Bitget as well. By the end of September 2022, users had gotten access to 10 yield farming pools, two for each reward token, and received nearly US$150,000 in reward tokens. As illustrated in the table below, staking BGB (put them to work be the diamond hands) yields significantly more than staking reward tokens. Of course, this is also a safe, convenient way to earn more for holders of such tokens.

Ethereum Merge on Bitget

We celebrate The Merge with the introduction of Bitget Pop Grab, a fun feature that allows friends of Bitget users to win coins for free - they just need to set up their Bitget account (takes less than 3 minutes). Send coins to remind your friends of your moments together - who says the digital space is bringing people away from each other?

Back to the topic, The Merge served as a huge speculative event for traders. Most traders didn’t hold their positions for too long, thus, there is a difference between the daily long/short ratio and the funding rate, as shown in the charts below. Please note that for the sake of easy interpretation, the funding rate here is calculated by taking the average of three funding rate cycles every day. BTC short dominated the long for two-thirds of the month (18 days), while it’s only 11 days for ETH. That is to say, short-term speculators were expecting Bitcoin price to drop more, which was actually not the case.

Bitcoin firmly maintained the US$20,000 key level throughout September, proving that mid and long-term traders had reasons to keep paying funding fees to short positions.

Meanwhile, it’s fascinating to see Ethereum funding rate plummeting around The Merge. This data responds to the daily Long/Short ratio for ETH in that the Ethereum price should go down. But ETH didn’t give in right away; it struggled to lock in an increase of 4% in value on September 15 before losing the US$1,500 mark.

In the 16 days after the transition, there were only five days where shorts had to pay longs, i.e., more short-sellers were willing to keep their positions open than bulls. Over the same period, Ethereum nosedived from US$1,635.368 to US$1,335.739 (-15%). A hard time to be bullish, especially with the uncertainties regarding the definition of Ethereum by authorities (is it a security or not) and the fact that Ethereum might not be as decentralised as advocates wanted it to be since validators of this network can and have chosen to not verify Tornado Cash transactions.

Spot Futures Activities

Futures activities, represented by the aggregated volume of all contracts, have dropped by 40%. It’s understandable, though, because “wave riders” were waiting for the precious moments right after Ethereum Merge only. Bitcoin dominated the futures markets, standing at 67-69% of the total open interest for September.

September is the month of Free Spot Trading. Trading any spot pair at absolutely ZERO Fees - the event is still going on until further notice! And in order to increase the spot selection, Bitget has introduced the Bitget ABC Programs: Bitget users will vote for their beloved token to be listed, and we sort out the new listings by the alphabet; there is always something to wait for every day.

GroupCoin Bitget Elite Club

Bitget is releasing new programs for all trader groups, which our users can fully utilise to develop an economic trading strategy. The first one is GroupCoin, a unique feature for Spot Trading. Users can team up to buy tokens in mass for extremely good prices, for example, a group of more than 2,000 can buy BTC at half the price. The second session of GroupCoin took place from September 8 to September 11, and the target is ETH. Although ETH didn’t make a new all-time high, that’s for sure a juicy deal.

For full-time traders, we invite you to join Bitget Elite Club to get rid of maker fees in the first months and waive fees for other types of transactions. Please get in touch with us here to get personalised solutions for your trading!

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