RESEARCH: Take a look at what happened in crypto last month


Bitcoin history doesn’t repeat, but it often rhymes. And even by crypto’s volatile standards, May was an eventful month.

Even by crypto’s volatile standards, May was a pretty rocky month. So with bitcoin currently down ~40% from its high earlier this year where do we go from here?

Last week Blockchain.com Chief Strategy Officer and Head of Markets Charlie McGarraugh, who accurately called the May sell-off, presented his case on blockchain.com podcast that the 2020–21 crypto bull market is still intact.

On Tuesday during blockchain.com monthly live event Head of Research Dr Garrick Hileman also issued a recommendation to medium-to longer-term hodl’ers (18-month and beyond timeframe) that current price levels are looking attractive for accumulating bitcoin (BTC).

Bottom-line: blockchain.com long-term confidence in the transformative and disruptive nature of blockchain technology and decentralized finance remains unshaken. And for anyone who missed bitcoin’s runup to $64k we believe now is an attractive entry point to own your first (or more) crypto.


Summary of this month’s Market Outlook report:

Market Movements

  • Crypto has already begun recovering from its May lows in the wake of positive national (El Salvador) and institutional adoption developments (eg MicroStrategy’s well oversubscribed $500m debt offering to buy more bitcoin)
  • The strong performance of gold in May +8% as price inflation data comes in hot is bullish for the bitcoin hard asset investment thesis


China crypto crackdown - our thoughts

  • While skepticism of China’s latest crypto crackdowns is understandable, this time does appear to be different
  • China is squandering its early lead in blockchain technology and a golden opportunity to utilize crypto to advance its geopolitical objectives
  • Bottom line: while China cannot kill bitcoin, crypto will be significantly smaller if China’s government can successfully suppress Chinese crypto


On-chain insights: Highlights from the Blockchain.com data science team

  • Activity on the Bitcoin network continued to decline for the month
  • The average fee per transaction was $15, a decrease from last month’s $30
  • Surprisingly, the estimated hash rate increased 2.5%, showing that mining bitcoin has remained profitable for most of the miners despite the drop in price
  • After months of a congested mempool, May saw a first drop in the mempool size around the 10th of May; this is a direct consequence of sustained hash rate levels and lower on-chain activity
  • Users can take advantage of the low fees and consolidate funds into a single UTXO, making transactions cheaping to send in the future
  • Sending transactions from the Blockchain.com Wallet will be cheaper now that it supports SegWit transactions and will continue to keeping the general state of the mempool low


How the Crypto Crash Reflected in DeFi Lending Protocols - Guest Post by Into the Block’s Jesus Rodriguez

  • DeFi lending markets were stress tested during last month’s crypto markets crash
  • On the Compound protocol, liquidations, repaid loans, and withdrawals all increased
  • Mid-market investors were the most active with the majority of loans between $10K-100K
  • More debt was repaid than new loans originated


What we’re reading, hearing and watching

  • The latest news from last month, featuring content from Bitcoin Magazine, Financial Times, Harvard Business Review, The Block and more.