The TIE Quarterly - EToro

The State of
Digital Assets
Q1 2020
IN PARTNERSHIP WITH
Q1 2020
A Message from eToro USA

The world is in the midst of a black swan event, and yet it is clear that the crypto
industry can sustain and even thrive through it which is a remarkable achievement.
We can now say with ever more confidence that the industry is resilient to boom
and bust cycles, and even (or especially) during a pandemic continue to play a role
in the vital necessity of decentralization. I believe the data shows a bullish case for
Guy Hirsch
the future, and we look forward to serving our role as a bridge to the future of
Managing Director
finance.
About eToro USA

eToro is a global, multi-asset trading platform with over 13 million registered users. At eToro, you can
share your real track record, portfolio, and trades with the community, allowing users to engage with
each other on trading ideas that are executed using real dollars. For those new to crypto trading, the
community and educational resources introduce users to this new asset class and the risk profiles
involved in it.
A Message from The TIE

Q1 saw incredible highs and lows for digital assets. While cryptocurrencies flash
crashed amidst macroeconomic uncertainty surrounding the coronavirus, this is
the first time we have seen digital assets discussed as a serious alternative asset
class in a macro context. We will look back at Q1 2020 as the beginning of the
Joshua Frank second generation for crypto.
Co-Founder & CEO
About The TIE

The TIE is an eToro research partner and the premier provider of alternative data for digital assets. The
TIE offers trusted and transparent data solutions that power the leading cryptocurrency institutional
investors and market participants. Among The TIE’s offerings are the exclusive digital asset sentiment
feed powered by the Twitter firehose and the first corporate actions feed for cryptocurrencies.
/
Q1 2020
Structure of the Report
The first section of the report covers the 15 coins that eToro supports for trading. Each coin has a
summary page that shows key quarterly metrics and notable events/narratives discussed in the news
over the quarter. Following this page is a short, data-driven piece, an in-depth story, or an interview,
that expands on one of the events or narratives.
After the section discussing each coin, there is a contributor section. This brings together industry
experts to share their perspectives, data, and experience on various topics that are most relevant to
this quarter’s activity.
Lastly, we interviewed leading CopyTraders from the eToro platform to let them share their unique
perspectives on digital asset trading in Q1 2020 and their perspectives on the market.
About the Data
Unless otherwise noted, all data is provided by The TIE. Throughout the report you will encounter a
number of proprietary sentiment-driven metrics produced by The TIE. In the context of this report,
sentiment is a measure between 0100 of how positive or negative Twitter conversations are on a
particular cryptocurrency over a given time interval. A score above 50 implies that conversations on an
asset are positive and a score below 50 implies that they are negative.
Daily Sentiment Score is a normalized representation of investor emotion over a rolling 24 hours as
compared to the previous 20 days.
Long-Term Sentiment Score is a normalized representation of investor emotion over a 50 day period
as compared to the previous 200 days.
Click here to learn more about The TIE’s proprietary sentiment data.
/ 1
Q1 2020
Key Takeaways
Cryptocurrency is Maturing
In the wake of COVID19 and the surrounding macroeconomic uncertainty, conversations are
increasing around cryptocurrencies as an alternative asset class and Bitcoin as a hedging asset. By the
end of the quarter, investors’ perceptions (Twitter-based sentiment) of Bitcoin and gold were more
correlated than ever before, and mentions of COVID19 surpassed those of the next Bitcoin halving in
Bitcoin-related headlines.
Cryptocurrency is Resilient
On March 12, 2020, digital assets experienced their worst price return day ever, with many assets
selling-off by over 50%. However, the market bounced back quickly, erasing a significant percentage
of the losses by the end of Q1. Despite the drop, 40% of assets ended Q1 with positive returns and
60% experienced an increase in tweet volume.
The Crypto Market is Highly (but Not Perfectly) Correlated

Over Q1, nearly all cryptocurrencies experienced highly correlated daily price movement. With the
exception of Dash, every coin hit its highest quarterly price between Feb 3, 2020 and Feb 19, 2020.
Every asset dropped to its lowest point on Mar 13, 2020. However, over the first three months of
2020, digital asset returns varied drastically from -22% to 58%.
While individual cryptocurrencies are correlated with the rest of the digital asset market, every coin
has its own narrative. Performance is heavily related to significant events and investor emotions
surrounding that coin. There is a case to be made for diversifying digital asset holdings.
/ 2
Q1 2020
Table of Contents
Individual Asset Pages 4

Bitcoin: The Digital Gold Narrative 7
Massive DeFi Growth Erased as ETH Crash Nearly Shuts Maker 20
IOTA Sentiment in the Aftermath of the Trinity Hack 26
eToro Founders Series: Dominik Schiener (IOTA Foundation) 29
TRON Justin Sun Dines with Buffett and Acquires Steemit 41
Quarterly Contributors 47
The Aftermath of the March 12th Crash 48
The Macro Narrative for Bitcoin is Far from Dead 52
The Upcoming Bitcoin Network Halving and Miner Profitability 56
CopyTrader Spotlight 58
DataDash 59
Crypto101 61
/ 3
Q1 2020
Bitcoin - Summary 8,536,493 35.10% 97%

11.41% $6,374.16 FOLLOWERS INVESTORS ARE LONG
as of March 31, 2020
Data on eToro Users as of April 1, 2020
QUARTERLY PRICE METRICS QUARTERLY SENTIMENT METRICS
Price Change vs. USD 11.41% Tweet Volume Change 47%

Price Change vs. BTC N/A Avg. Tweet Volume 27,857
Open $7,195 1 BTC Max Tweet Volume 58,332 Mar 13
Close $6,374 1 BTC Min Tweet Volume 18,418 Jan 26
High $10,458 Feb 13 % of Days Positive Sentiment 60%
Low $4,107 Mar 13 Most Positive Day 81/100 Jan 7
Max Retracement from High 61% Most Negative Day 19/100 Mar 12
% of Days Positive vs. USD 48%
% of Days Positive vs. BTC N/A
NOTABLE NARRATIVES
The Aftermath of the March 12th Crash

Page 48 Sacha Ghebali of Kaiko discusses the ramifications of Bitcoin’s flash crash on liquidity and trading
The Macro Narrative for Bitcoin is Far from Dead

Page 52 Kevin Kelly of Delphi Digital writes about Bitcoin in the face of growing macroeconomic
uncertainty
The Upcoming Bitcoin Network Halving and Miner Profitability

Page 56 John Todaro afrom TradeBlock discuss decreasing hash rate and price pressure leading up to
the halvening
/ 4
Q1 2020
Coronavirus has Become the Dominant Narrative for Bitcoin
The Halving
A “halving” is a pre-programmed, scheduled
reduction in the inflation rate of an asset’s
supply by 50%. Bitcoin’s next halving was its
leading narrative from the end of 2019 into
the beginning of 2020. This halving, which
will take place on approximately May 13,
2020, had been a dominant narrative
discussed by many in the digital asset
space because, all things being equal, a
reduction in new supply — combined with
consistent demand and pressure on miners
— would hypothetically lead to positive
price movement for BTC.
Most Frequently Used Words When Discussing the Halving
Jan 1  Mar 31, 2020
Coronavirus Takes the Stage

While the halving dominated early conversations in Q1, mentions of the coronavirus in cryptocurrency
publications skyrocketed in early February and significantly eclipsed publicity around Bitcoin’s halving.
Relative Mentions in Crypto Publications: Coronavirus vs. The Halvening
/ 5
Q1 2020
Bitcoin’s Market Cap Dominance Remains High
What is market cap dominance?

Market cap dominance represents an individual assets share of the overall cryptocurrency market cap.
The History of Bitcoin’s Market Cap Dominance

On January 3, 2018, in the middle of the cryptocurrency boom, Bitcoin’s market cap dominance
dropped to an all-time low (38.34%, as investors looked to altcoins for potential gains). But by
September 2019, Bitcoin surged, eclipsing the rest of the crypto market, with 70% market dominance.
Q1 2020 Market Cap Dominance

Bitcoin began Q1 with a market cap dominance of 68.18% before dipping to a low of 60.97% on
February 14. At the close of the quarter, Bitcoin represented 65% of the overall cryptocurrency market
cap.
/ 6
Q1 2020
In Depth: The Digital Gold

Narrative for Bitcoin
“The root problem with conventional currency is all the trust that’s required to make it
work. The central bank must be trusted not to debase the currency, but the history of
fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money
and transfer it electronically, but they lend it out in waves of credit bubbles with barely a
fraction in reserve.”
 Satoshi Nakamoto (February 2009
Born During the 20082009 Financial Crisis

Bitcoin was born during the last financial crisis at a time of massive bank bailouts, inflation, and central
bank intervention. Q1 2020 was dominated by coronavirus, massive government stimulus packages,
and slashes to interest rates. In this time of great macroeconomic uncertainty, Bitcoin’s digital gold
narrative has reached its apex.
Mentions of Gold in Bitcoin Headlines Hit New Highs

Relative and absolute mentions of
gold in headlines discussing Bitcoin
have reached all-time highs. The
digital gold narrative saw serious
momentum from mid-December to
early February 2020. After falling at
the beginning of the month, the
digital gold narrative has once again
drawn significant interest as the
broader economy has faltered in the
wake of coronavirus. Journalists’
mentions of Bitcoin in relation to
/
gold is nearing an all-time high.
/ 7
Q1 2020
Sentiment Correlation: Bitcoin, Gold, and S&P 500

Over the last 12 months, investor sentiment between Bitcoin and the S&P 500 has generally been
closer than that between Bitcoin and gold . In February 2020, Bitcoin and the S&P 500 achieved a
sentiment correlation of r=.59. However, as the coronavirus started to dominate conversations, Bitcoin
sentiment became significantly more correlated with gold than with the S&P 500. In March, the Bitcoin-
gold correlation hit r=.72, which was the highest correlation between any pair of the three assets.
Bitcoin and Gold Sentiment Highly Correlated in March 2020
Bitcoin and gold sentiment has been highly correlated since the beginning of March. The large
changes in sentiment on both assets have occurred in unison or within close proximity.
/ 8
Q1 2020
Bitcoin Outperforms S&P 500 in Q1 2020
Bitcoin significantly outperformed both the S&P 500 and gold between January and mid-March, before
crashing from a 9.89% YTD return to a -30.17% YTD return in a single day on March 12, 2020. Bitcoin
finished the quarter with a loss of -10.45%, but still outperformed the S&P 500, which ended the
quarter down -19.92%. Despite outperforming gold for nearly the entire quarter, Bitcoin finished
significantly below gold’s positive 3.6% YTD return because of Bitcoin’s drop on March 12.
/ 9
Q1 2020
Bitcoin and Gold Sentiment Became Highly Correlated
Between October 2019 and February 2020, gold and the S&P 500 had negative correlations with one
another. Gold is typically viewed as a safe-haven asset during stock market sell-offs, as it is expected
to have an inverse price correlation with the S&P (a perceived higher-risk asset). However, it is
interesting to note that gold also faltered in March 2020 amidst the S&P 500’s crash. For the first time
over the last 6 months, we are witnessing a positive price correlation between gold and the S&P 500.
As we have seen the “Bitcoin as a Digital Gold” narrative begin to surge, it will be interesting to see
how the asset class correlates over the next few months with gold and the S&P 500. If that narrative
proves true, one would expect to see Bitcoin having a positive price correlation with gold and a more
negative correlation with the S&P 500 during an economic downturn.
During the beginning of economic downturns, many investors may flock to cash and liquidate their
holdings across the board, which might partially explain Bitcoin’s crash alongside equities and gold on
March 12.
/ 10
Q1 2020
Bitcoin Cash - Summary

827,722 8.34% 99%
6.25% $217.47 FOLLOWERS INVESTORS ARE LONG
Price Change vs. USD 6.25% Tweet Volume Change 23%

Price Change vs. BTC 19.94% Avg. Tweet Volume 1,109
Open $204.67 .0285 BTC Max Tweet Volume 2,309 Jan 14
Close $217.47 .0341 BTC Min Tweet Volume 649 Jan 8
High $493.03 Jan 14 % of Days Positive Sentiment 47%
Low $139.22 Mar 13 Most Positive Day 78/100 Feb 14
Max Retracement from High 72% Most Negative Day 16/100 Jan 24
% of Days Positive vs. BTC 49%
NOTABLE NARRATIVES
BCH, BSV Block Halvings Will Force Miners to Bitcoin (BTC  Report
Tether Launches Stablecoin Token on Bitcoin Cash via Simple Ledger Protocol
Bitcoin Cash Will Avoid Chain Split as Mining Tax Dies
Bitcoin Cash Sees no Blocks for 5 Hours, No Significant Backlog Due to Low Usage
US Judge Dismisses Bitcoin Cash ‘Hijack’ Lawsuit Against Bitmain, Kraken
/ 11
Q1 2020
Bitcoin Cash is Halving Too — Does Anyone Care?
Bitcoin Cash Block Reward Reduction

Bitcoin Cash, the largest hard fork of Bitcoin by market cap, is experiencing its first halving (inflationary
reduction) on April 8, 2020. Like Bitcoin, BCH will see its block reward drop from 12.5 to 6.25 coins per
block.
Unlike LTC, BCH Did Not Surge in the Weeks Before its Halving
Litecoin was one of the latest major altcoins to experience a halving. During the month leading up to
Litecoin’s halving (January 1, 2019  August 5, 2019, the coin returned 176%, which was significantly
better than other major altcoins (ETH 48%, XRP 15%, BCH 86%. However, Bitcoin Cash did not see
any notable outperformance leading up to eight days before its halving (end of Q1 2020. This provides
a counterexample to the theory that halvings have a significantly positive price impact on all coins.
January 1, 2019 to 8 Days Before September 4, 2019 to 8 Days Before

Litecoin Halving (208 Days) Bitcoin Cash Halving (208 Days)
Ethereum 48.06% Ethereum 23.87%

XRP 14.82% XRP 32.62%
Bitcoin Cash 86.30% Bitcoin Cash 25.32%
Litecoin 176.09% Litecoin 41.67%
/ 12
Q1 2020
Cardano - Summary 317,553 7.62% 100%

6.94% $0.030553 FOLLOWERS INVESTORS ARE LONG
Price Change vs. USD 6.94% Tweet Volume Change 7.46%

Price Change vs. BTC 5.04% Avg. Tweet Volume 453
Open $0.032832 456 Sats) Max Tweet Volume 1,040 Jan 28
Close $0.030553 479 Sats) Min Tweet Volume 248 Mar 19
High $0.072070 Feb 13 % of Days Positive Sentiment 45%
Low $0.019130 Mar 13 Most Positive Day 83/100 Jan 28
NOTABLE NARRATIVES
IOHK Releases Cardano (ADA Scaling Protocol Hydra, Reboots Byron Codebase
Cardano Community Outraged by Cardano Staking Cartel in Shelley Testnet
Cardano (ADA Foundation Engages in Decentralized Computing Effort to Fight COVID19
Fintech Think Tank Takes Legal Action Against Cardano Foundation
Cardano to Roll Out Commercial Infrastructure, Denies Coronavirus Delay
/ 13
Q1 2020
Cardano’s Share of the Overall Crypto Market has Fallen 10x
Cardano’s Market Cap Dominance Drops Significantly

On January 2, 2018, Cardano’s market cap dominance hit an all-time high of 4.82%. On March 22,
2020, ADA hit its lowest point in at least three years as its market cap dominance fell to 0.41%, a drop
of 91%.
Most of Cardano’s drop occurred in 2018, though the asset still accounted for as much as 1.37% of the
total digital asset market cap within the past year. That 52-week high was in the beginning of Q2 2019,
following the launch of Cardano 1.5.
Although Cardano’s market cap dominance has fallen, its share of crypto conversations on Twitter has
remained mostly consistent since 2018 (averaging between 0.51.0% of tweets on a daily basis). The
best individual days for ADA tweet volume occured in March 2019, following the release of Cardano
1.5. On March 22, 2019 Cardano hit an all-time high tweet volume dominance of 2.56%.
/ 14
Q1 2020
Dash - Summary 648,779 8.53% 99%

Price Change vs. USD 58.17% Tweet Volume Change 60.97%

Open $41.19 .0057 BTC Max Tweet Volume 891 Jan 15
High $140.70 Jan 15 % of Days Positive Sentiment 49%
Max Retracement from High 75% Most Negative Day 23/100 Feb 16
NOTABLE NARRATIVES
Announcing the Release of Dash Platform v0.11
Crypto Rating Council Publishes Ratings for Cosmos, Dash, and Ethereum Classic
Bitcoin and Dash Spike Following Venezuela Internet Shutdown
/ 15
Q1 2020
The Prices of Digital Assets Were Highly Correlated
Dash Daily Price Changes Were the Least Correlated
Among the fifteen assets available for trading on eToro US, Dash was the least correlated with other
digital assets. More specifically, Dash and Tezos were the least correlated pair at r=.47. It is interesting
to note that despite having the least correlated sentiment among any pair of digital assets, Dash and
Tezos were the two best performing tokens, with Dash returning 58.17% over the quarter and Tezos
returning 20%.
We believe that DASH may be the least correlated asset due to its surge in early January, after it was
announced that the coin would be accepted in Burger Kings across Venezuela (Link).
Q1 2020 Daily Price Change Correlations
Large Cap Daily Price Change Correlations
Bitcoin experienced high daily price change correlations with the majority of the digital asset market.
The correlation between Bitcoin and each of the other assets available for trading on eToro (other than
Dash) was greater than r=.72. Bitcoin’s daily price change was most correlated with Ethereum, NEO,
and Bitcoin Cash. The largest correlation among any pair of coins was between NEO and Ethereum at
r=.94.
/ 16
Q1 2020
EOS  Summary 232,398 6.01% 99%


Price Change vs. BTC 2.87% Avg. Tweet Volume 148
Open $2.58 0.00036 BTC Max Tweet Volume 322 Feb 5
Close $2.22 0.00035 BTC Min Tweet Volume 71 Jan 4
NOTABLE NARRATIVES
Block.one Absorbs Team Behind Now-Defunct Block Producer EOS New York
EOS to Become More ‘Community-Driven’ as Block.One Seeks to Use Dfuse’s Open-Source APIs
Block.one CEO Criticizes EOS Worker Proposal System
Coinbase, EOS Community Clash Over Supposed ‘Degraded Performance’
Block.One Voice Social Network Beta Goes Live
/ 17
Q1 2020
EOS Tweets Are Increasingly Coming from the Same Accounts
Dispersion
Dispersion measures the percentage of tweets on a particular asset that are coming from unique
Twitter accounts. So, if Bitcoin’s dispersion was 50%, that would mean 50% of tweets came from
different Twitter users, or, on average, a Twitter user discussing Bitcoin tweeted two times in a day.
EOS Dispersion Tanks

EOS had the largest percentage of its tweets coming from unique Twitter accounts when compared to
the largest cryptocurrencies by market cap (Bitcoin, XRP, Bitcoin Cash, and Ethereum). However, over
the course of Q1, EOS’ dispersion dropped by 28 points from 78% to 50%, which suggests EOS
conversation on Twitter became more centralized.
/ 18
Q1 2020
Ethereum - Summary 5,022,995 23.92% 99%

Price Change vs. USD 3.05% Tweet Volume Change 11.56%

Open $129.63 .018 BTC Max Tweet Volume 10,849 Feb 12
Close $133.59 .021 BTC Min Tweet Volume 4,154 Jan 11
NOTABLE NARRATIVES
Ethereum 2.0's Phase 0 Multiclient Testnets will Likely Go Live in April, Predicts Buterin
EY Launches Baseline Protocol, an Open Source Initiative for the Public Ethereum Blockchain
DeFi Giant MakerDAO Avoiding Shutdown in the Face of Tanking ETH  For Now
Citi Says it Recently ‘Topped Up' its Equity Stake in Ethereum-based Trade Financing Platform Komgo
A New Ethereum 2.0 Audit has Highlighted Potential Security Vulnerabilities
/ 19
Q1 2020
In Depth: Massive DeFi Growth Erased

What is DeFi
as ETH Crash Nearly Shuts Maker

DeFi (decentralized finance) is a technological movement, leveraging cryptocurrency to provide
universally accessible financial services. The DeFi community seeks to provide open financial
alternatives for everything from savings, loans, insurance, trading, and more.
Today, nearly all of the leading DeFi applications (also known as dApps) are developed on top of the
ethereum blockchain, leveraging ETH’s smart contract technology. Unlike traditional financial services,
dApps are managed autonomously by code (rather than people) and are created to be global,
permissionless, transparent, and interoperable.
Total Value Locked in DeFi Jumps to ATH in February

According to DeFi Pulse
(Link), total value locked in
decentralized finance (DeFi)
protocols nearly doubled
from $686M on January 1,
2020 to $1.24B on February
14, 2020, before crashing
and ending the quarter at
$552M.
DeFi Has Become a Large Part of the

Ethereum Story
In Q1 2020, DeFi was the 6th most used word

in Ethereum headlines behind Ethereum, ETH,
Price, Bitcoin, BTC, and XRP.
The chart on the left displays the words most

frequently used by journalists when discussing
Ethereum in Q1.
/ 20
Q1 2020
DeFi Mentions Hit Highs but Have Fallen
Mentions of DeFi by
cryptocurrency journalists hit an
all-time high in Q1. This peaked
in late February 2020, but
relative mentions have fallen
since hitting those highs.
Bloody Thursday Almost Forces MakerDAO Shutdown after ETH Crashes
MakerDAO is the largest and most important DeFi dApp, accounting for more than 50% of the total
value locked in DeFi. On March 12, as ETH crashed, some vaults that contained Ethereum used as
collateral to mint DAI (the USD-pegged stablecoin developed by MakerDAO became
undercollateralized. Because the Ethereum price fed to MakerDAO via Oracle was below the vault’s
collateralization limit, the Ethereum held in the vaults became available for liquidation. Normally, in
order to raise DAI to reimburse the liquidated vault’s debt, Maker users will call contracts to start
auctions for vaulted ETH.
As the price of Ethereum tumbled and transactions clogged the ETH network (spiking the price of ETH
gas), a significant number of vaults became available for liquidation. Fearing further price slippage and
the lack of ETH liquidity to absorb these liquidations, all but one Maker user halted their activity. As a
result, one user continued to call contracts to trigger liquidations, bidding $0 for the ETH with no
competition for 40 minutes before other users came back online. Over that time frame, a significant
number of vaults were liquidated with 0 DAI coming back into the system, bringing MakerDAO from a
$500K surplus to a $4M debt.
As a result, the Maker team considered shutting down the network, triggering all ETH-collateralized
Dai stablecoins in circulation to convert to the underlying ETH. If the shutdown would have occurred,
the crypto market would have been flooded with an additional 2.4 million Ethereum tokens, as prices
had already tumbled from $200 to below $125.
Maker was able to avoid a shutdown by conducting an auction of MKR tokens in exchange for Dai to
cover the $4.5MM in undercollateralized debt. But the event scared many participating in the DeFi
ecosystem. Since the crash, total value locked in DeFi has fallen by over 50%, after hitting an all-time
high in mid-February.
/ 21
Q1 2020
On the day of the crash, sentiment on Ethereum hit a quarterly low while tweet volume hit its second
highest level since June 2019.
/ 22
Q1 2020
Ethereum Classic - Summary

641,262 7.32% 99%
Price Change vs. USD 10% Tweet Volume Change 40.3%

Open $4.50 .00063 BTC Max Tweet Volume 840 Jan 17
NOTABLE NARRATIVES
Ethereum Classic Cooperative Director Rebuts Mismanagement Claims
Ethereum Classic Collective Board Member Resigns, Withdraws Funding Support
On Ethereum Classic Mining Rewards With The New Monetary Policy
Ethereum Classic Successfully Completes ‘Agharta’ Hard Fork
/ 23
Q1 2020
Ethereum Classic’s Quarterly Performance Buoyed by Hard Fork
Ethereum Classic Agharta Hard Fork

On January 12, Ethereum Classic completed its Agharta hard fork under Ethereum Classic
Improvement Proposal (ECIP 1056. This hard fork enabled the Constantinople and St. Petersburg
upgrades, which were previously made available on Ethereum (ETH.
Ethereum Classic Surges in January and Early February

Following Ethereum Classic’s hard fork, Ethereum Classic jumped by 168% in the proceeding 25 days,
hitting a quarterly high of $13.15 on February 6, 2020.
First a Hard Fork, Then a Hard Crash

After hitting a high of $13.15 25 days after the Agharta hard fork, Ethereum Classic saw a 75% decline
over the next 36 days as the coin dropped back down to $3.30  its quarterly low.
Over the quarter, Ethereum Classic saw negative price movement in 52 of 91 days and negative
sentiment in 51 of 91 days. ETC finished up 10%, buoyed in a large part by its strong performance in
January and early February, following the Agharta hard fork.
/ 24
Q1 2020
IOTA  Summary 170,352 5.61% 99%

Price Change vs. USD 2.85% Tweet Volume Change 8.95%

Open $0.160043 2,224 Sats) Max Tweet Volume 1,605 Feb 14
Close $0.155487 2,493 Sats) Min Tweet Volume 234 Jan 12
NOTABLE NARRATIVES
Trinity Attack Incident Part 1 Summary and Next Steps
Chrysalis (Path towards IOTA 1.5
IOTA Founder Personally Refunding Hack Losses to ‘Safeguard’ Project’s Remaining Reserves
Coordicide Alphanet Out Now
The IOTA and Eclipse Foundations Launch Tangle EE Working Group to Accelerate
Commercial Adoption of IOTA
/ 25
Q1 2020
In Depth: IOTA Sentiment in the

Aftermath of the Trinity Hack
Over the first quarter of 2020, IOTA had the least IOTA Sentiment Correlations
correlated sentiment with any other digital asset Q1 2020
available for trading on eToro. On February 12, EOS 0.23
IOTA announced that their Trinity Wallet had been Bitcoin 0.22
hacked, causing an immediate decline in Ethereum 0.19
Ethereum Classic 0.18
sentiment and a sustained drop in price through
Bitcoin Cash 0.15
the middle of March. A day before the hack, IOTA
Stellar 0.15
had achieved its highest daily sentiment score Dash 0.14
(91/100 in nearly six months), but the coin quickly Tezos 0.13
crashed down to a daily sentiment score of XRP 0.12
17/100 in just three days. Litecoin 0.12
Cardano 0.05
ZCash 0.01
Daily Sentiment Score measures how positive or NEO 0.00
negative investors have been about a particular asset
TRON 0.16
over the past 24 hours vs. the previous 20 days. A
sentiment score over 50 means that sentiment has
become increasingly positive on an asset. Below 50
means that sentiment has turned negative.
After crashing in February, IOTA

sentiment largely stabilized,
beginning in early March. IOTA
sentiment rose significantly on
March 7 after co-founder David
Sønstebø pledged to pay back
$1.97M of his own money to victims
of the hack. IOTA saw its most
positive day since February 11 (one
day prior to the Trinity hack), the
final day of the quarter.
/ 26
Q1 2020
Long-Term Perceptions of IOTA Also Falter
IOTA also experienced a significant decline in its long-term sentiment score, a measure comparing
investors' perceptions of an asset over the last thirty days vs. the previous six months. Due to the
long-term nature of the metric, a significant number of strongly positive or negative conversations
over a period of multiple days are required to move long-term sentiment in a meaningful way.
From January 1 to February 12, IOTA’s long-term sentiment score increased from 21/100 to 41/100, as
investors became increasingly optimistic about the coin. During that time, price more than doubled
from $0.16 to $0.34. However, in the aftermath of the Trinity Hack, IOTA saw its long-term sentiment
score fall from 41/100 down to 30/100 in the proceeding two weeks alongside price.
After David’s Sønstebø announced his repayment to hack victims on March 7 and the re-launch of the
IOTA mainnet on March 10, long-term sentiment largely stabilized for the duration of the quarter.
/ 27
Q1 2020
Not All is Negative
While sentiment dipped for a few weeks following the IOTA hack, sentiment largely stabilized
throughout the remainder of the quarter after IOTA’s mainnet was relaunched. Significant long-term
sentiment drops due to hacks have occured before and coins have recovered. It took just over 4
months for the long-term sentiment of Ethereum Classic to rebound following the 51% attack on the
coin on January 7, 2019.
Pos Sen Days Neg Sen Days
Stellar 61 30
It is interesting to note that despite Bitcoin 55 36
IOTA having the least correlated IOTA 52 39
sentiment with any other coin, Ethereum 52 39
Bitcoin Cash 47 44
coupled with the fact that it was
XRP 47 44
hacked, it still managed to have the
NEO 47 44
third most days with positive Litecoin 46 45
sentiment this past quarter — tied Dash 45 46
with Ethereum, but behind Stellar EOS 45 46
ZCash 42 49
and Bitcoin.
Tezos 42 49
Ethereum Classic 41 50
Cardano 41 50
TRON 41 50
/ 28
Q1 2020
eToro Founders Series

Dominik Schiener - IOTA
Co-Chairman of the Board of Directors & Founder of IOTA

Dominik Schiener is the co-founder of the cryptocurrency IOTA, a disruptive
technology that enables machines to store and send money frictionlessly
between one another. In 2017, he co-founded the IOTA Foundation and
established Germany’s first nonprofit foundation that enables and fosters
permissionless ecosystems powered by distributed ledgers.
What is IOTA and why should someone new to IOTA be interested in the project?
IOTA was founded in 2015 with the idea of creating a distributed ledger protocol that is designed for
the Internet of Things. Since the very beginning, we have done things differently, both with our
technology (we use a Tangle), our adoption (we have a strong focus on enterprise-readiness) and our
governance (we are a German non-profit foundation). We see IOTA as an essential digital
infrastructure layer, enabling secure data and money transfers for machines and humans.
What is a Tangle and how is it different from a blockchain? What about IOTA and its
architecture makes it uniquely deployable to solve real world problems?
Because IOTA uses a DAG Directed Acyclic Graph) instead of a blockchain, we do not have the same
limitations and problems as other projects. We have a real solution to scalability, we have no miners or
energy waste, and we have no transaction fees. This makes IOTA uniquely positioned to solve real
world problems, and it is one of the main reasons why we’ve gained so much attention from startups
and corporations so far.
What are the most exciting developments for IOTA in Q2 and throughout the rest of
2020?
First of all, Chrysalis, which will bring forth a completely new and much improved experience for
developers, node operators, and network users of IOTA. Second, the Coordicide testnet, which will
show the world what the future of IOTA will look like, and what our roadmap for its launch on the
mainnet looks like. And lastly, I think that by Q2, we will see a lot more adoption of IOTA with several
product launches.
We are also making very exciting progress on smart contracts and tokenized assets for which we hope
to release more alpha products soon.
/ 29
Q1 2020
What is Chrysalis and how does that play into the roadmap for IOTA?
Chrysalis is what we call IOTA 1.5  the upgrade of the IOTA protocol before the coordicide, which
includes many improvements to scalability and usability in the IOTA network. We are introducing
reusable signatures, UTXO (which will enable tokenized assets), atomic transactions, and several
performance improvements. With these upgrades our primary objective is to make IOTA enterprise-
ready and empower our ecosystem to develop market-ready solutions with IOTA.
Can you tell us about Coordicide and what the release of the alphanet a few weeks ago
means. What are the major improvements that Coordicide brings?
Coordicide will be the most major protocol and network upgrade today. We are essentially transitioning
towards a new version of the consensus protocol of IOTA that will remove the bottlenecks of today
(coordinator and scalability limitations) and be fully decentralized and scalable. You can read more
about the Coordicide on our website (Link). We are working with several universities and researchers
on Coordicide and are right now in the specification phase, where we’re preparing a yellow paper for
everyone to review.
The first alphanet already launched several weeks ago and we are right now preparing for the next
major release which will increase value transfers and the actual consensus algorithm. Our goal is to
have an incentivized testnet by the end of the Summer.
IOTA’s Trinity Wallet was hacked on February 12. Can you tell us a bit more about the
hack? How it happened, why it happened, and what IOTA has done to address this
vulnerability moving forward?
Essentially, a third-party integration into the Trinity wallet called Moonpay got hacked, which allowed
an attacker to inject malicious code into Trinity and steal the seeds of users. The hacker was able to
steal around $2.2M worth of tokens until we stopped the attack by shutting down the coordinator and
preventing further thefts.
Our team worked incredibly professionally and communicated transparently (Link) throughout the
hack, allowing most Trinity users to eventually, safely transition their funds. This was certainly a big
lesson for us and for the entire space. Security is not just about your own code, but also about others.
Since the Trinity incident, we’ve implemented several security measures and procedures for all of our
open-source repositories and are now already working on the architecture of the new Trinity wallet,
which, apart from a Rust core, will also include hardware security.
/ 30
Q1 2020
What is working in a decentralized workplace like? How has the coronavirus impacted
how IOTA functions and what are the implications, if any, for a cryptocurrency like IOTA
both in terms of operability of the network and how all of the players in the IOTA
ecosystem interact?
The Foundation consists of 110 people that are distributed across 26 countries. Apart from shutting
down the Berlin office at the beginning of March, we haven’t really felt the impact on our work, as
we’ve always been remote.
I think overall, this is a good time to reflect on our strategy and objectives and to make sure that we
have a strong foundation with our technology to come out of this crisis stronger than before.
What are some of the IOTA Foundation’s most exciting partnerships and pilots, and what
are the implications of those for consumers broadly and the IOTA network?
I obviously can’t speak about the most exciting ones, as they are still under NDA, but we’ve had many
exciting announcements and collaborations over the past year, like, for example, Jaguar Land Rover
(Car eWallet), Dell Technologies (Data Confidence Fabric), or STMicroelectronics. This year, we hope
to launch more testbeds and real products that our community can download and use.
Where else can listeners find out more about IOTA?
You can follow us on Twitter (Link) or watch our YouTube videos (Link) to learn more about IOTA, our
partners, and our technology.
/ 31
Q1 2020
Litecoin - Summary 975,765 14.51% 99%


Price Change vs. BTC 8.97% Avg. Tweet Volume 1,635
Open $41.33 .0057 BTC Max Tweet Volume 6,276 Feb 8
NOTABLE NARRATIVES
Developer Predicts Litecoin Mimblewimble Testnet Launch by September
Charlie Lee Proposes Voluntary Mining Reward Donations to Fund Litecoin Ecosystem.
Litecoin Foundation Partners With MeconCash, Enabling Fiat Withdrawal At Over 13,000 ATMs
Litecoin Foundation Partners With BlockFi To Provide Litecoin Users More Options
/ 32
Q1 2020
The Larger the Asset, the More Correlated its Sentiment
Litecoin, Ethereum, and Bitcoin Daily Sentiment
Interestingly, Ethereum, Bitcoin, and Litecoin all had their least positive days on March 12, the day
before “Black Thursday”, when crypto markets crashed. All three coins also experienced surges in
tweet volume over the quarter, with Bitcoin jumping 47%, Ethereum 12%, and Litecoin 26%.
What is also interesting is that Bitcoin and Litecoin both experienced their quarterly highs on February
13, with Ethereum trailing just two days behind.
Q1 2020 Daily Sentiment Correlations
Large Cap Daily Sentiment Correlations
In Q1 2020, Bitcoin and Ethereum had the most correlated sentiment out of any digital currencies.
Broadly speaking, the largest digital assets tended to have significantly more correlated sentiment
than smaller altcoins. For example, Bitcoin’s sentiment was most correlated with Ethereum, Litecoin,
Bitcoin cash, and XRP, while it was the least correlated with Cardano, Ethereum Classic, IOTA, and
Stellar.
In other words, investors tend to be positive or negative about Bitcoin and Ethereum at similar times,
while they may have the opposite opinion of an altcoin.
/ 33
Q1 2020
NEO  Summary 287,486 7.53% 100%

Price Change vs. USD 21.66% Tweet Volume Change 59.15%

Open $8.68 0.00121 BTC Max Tweet Volume 242 Feb 14
NOTABLE NARRATIVES
NEO Releases $11 Million From Cold Wallet to Fund Itself Through 2020
NEO’s Switcheo Exchange Will Build Zilliqa’s Upcoming DEX
Racing Manager Developers Enter the NEO Arena
/ 34
Q1 2020
NEO’s NVTweet Ratio™ Hits an All-Time Low
NVTweet Ratio™
The NVTweet ratio compares a cryptocurrency’s social conversation relative to its market cap. The
NVTweet ratio looks at how many tweets a particular coin has per $1M in market cap. The lower a
coin’s NVTweet ratio the more tweet volume it has per $1M in market cap. NVTweet Ratio= Market
Cap / 1M / 30Day Average Tweet Volume)
Xi Announces China Should Seize the Opportunity to Adopt Blockchain

On October 25, 2019, Chinese president Xi Jinping said that the country needed to “seize the
opportunity” to leverage blockchain technology (Link). Following that announcement, many digital
assets based in China saw large immediate upwards price movement, including NEO, which saw its
price grow by over 65% in three days. While NEO’s price increased significantly, its Twitter activity
skyrocketed even further, with its 30-day average tweet volume increasing by 171% in a matter of
weeks.
In the month after the announcement, NEO’s NVTweet ratio halved from 10.66 to 5.33, meaning the
coin traded at a lower premium of its social activity. Following that month-long period, NEO’s NVTweet
ratio began a two-month ascent, as the asset’s market cap fell much more slowly than its social
activity. The asset hit an NVTweet ratio of 13.85 on January 17  its highest measure since April 2018.
Cryptos’ Black Thursday
Over the first quarter of 2020, NEO saw its 30 day average tweet volume spike by 59%, while its price
dropped by 22%. Immediately proceeding crypto’s Black Thursday on March 12 (one of the largest
sell-offs in the history of
cryptocurrencies), NEO saw its
NVTweet ratio hit an all-time low of
3.02. Between February 15 and
March 13, the token experienced a
75% decline in price, as 30-day
average twitter volume stayed
constant, leading to a 75% decline in
NEO’s NVTweet ratio.
/ 35
Q1 2020
Stellar - Summary 453,415 12.43% 100%

Price Change vs. USD 9.47% Tweet Volume Change 24.81%

Open $0.045118 627 Sats) Max Tweet Volume 237 Feb 12
NOTABLE NARRATIVES
IoT App Nodle Moves From Stellar Blockchain to Polkadot
Grammy-Nominated Artist Akon to Launch Cryptocurrency on Stellar
German Bank to Offer Tokenized Securities Based on Stellar
Thai Stellar-Based Startup Lightnet Raises $31M to Replace SWIFT
Stellar Development Foundation Pockets 98 Percent of Newly Created XLM Tokens
/ 36
Q1 2020
A Not So Stellar Token Burn
Stellar Burns Half the Supply of XLM

On November 4, 2019, the Stellar Development Foundation burned more than 50% of the supply of
XLM. In a blog post, the SDF wrote that “in time and after a lot of thought, we’ve come to realise [our
allocations of XML are] too large. SDF Stellar Development Foundation] can be leaner and do the work
it was created to do, using fewer Lumens(… So, we’ve decided to reduce our Lumen allocations.”
All things being equal, one would expect that a 50% reduction in supply would lead to a doubling in
price. However, that was not the case for XLM, as price only rose by 20% in the immediate aftermath.
Despite the burn, XLM has fallen by 41% since November 4, and the buzz (a 12x increase in Twitter
conversations) mostly fizzled out after two days. Over Q1 2020, XLM conversations declined by 25%,
while the coin dropped by 9.5% vs. the USD.
/ 37
Q1 2020
Tezos - Summary 84,561 2.34% 99%

20% $1.62 FOLLOWERS INVESTORS ARE LONG
Price Change vs. USD 20% Tweet Volume Change 16.29%

Open $1.35 0.00019 BTC Max Tweet Volume 1,760 Feb 12
NOTABLE NARRATIVES
Tezos Foundation had Over $600M in Assets as of January, 47% in Bitcoin
Tezos Grants $37 Million to Ecosystem Developers
Vertalo to Tokenize 22 Securities Worth $200M on Tezos Blockchain
Tezos to Join DeFi Movement with StakerDAO
Tezos Foundation to Settle All Class Action Lawsuits
/ 38
Q1 2020
Tezos Surges
Among the cryptocurrencies available for trading on eToro US, Tezos had the second best quarter,
returning 20% vs. the US dollar and 35.45% vs. Bitcoin.
As Tezos has grown, so too has its share of conversations in the digital asset space. Among the mid-
cap altcoins available for trading on eToro US, Tezos has grown from a 3% share of Twitter
conversations in January 2019 to a high of 23% in February 2020. The chart below visualizes mid-cap
altcoins tweet volume shares from January 2019 to the end of Q1 2020.
/ 39
Q1 2020
TRON  TRX 257,646 4.21% 99%

Data on eToro Users as of April 1st 2020
Price Change vs. USD 12.55% Tweet Volume Change 41%

Open $0.013294 185 Sats) Max Tweet Volume 593 Feb 14
NOTABLE NARRATIVES
Tron Launches its Own MakerDAO-like Stablecoin System
Fired Employees’ Harassment Suit Against Tron Will Move to Private Arbitration
Tron Executes Hostile Takeover of Steem, Exchanges Collude
Tron Founder Justin Sun Finally Met With Warren Buffett for Charity Lunch
Pornhub Adds Tether to its Payment Options via TRON Wallet
/ 40
Q1 2020
Justin Sun Dines with Buffett and

Acquires Steemit
Justin Sun Gets His Lunch with Warren Buffett
Originally scheduled for July 2019 and postponed for

months, TRON founder Justin Sun finally had lunch with
Warren Buffett — his reward for his record-breaking
$4.5M bid as part of a fundraiser for the Glide
Foundation.
On February 6, when it was announced that the lunch

had finally taken place, TRON experienced its second
Justin Sun pictured with Warren Buffett,
highest daily tweet volume of the quarter (554 tweets) eToro CEO Yoni Assia, Litecoin’s Charlie Lee
as price jumped by as much as 13% within the day. and others at charity lunch
The initial announcement of Sun winning the auction on June 3, 2019 surged TRON’s daily tweet
volume to 1,131, its highest level since June 2018. While TRON saw some intraday upwards price
movement on the day of the announcement, it ultimately closed down 12.6% on the day. TRON price
fell 69.73% from the initial Warren Buffett announcement to the end of Q1 2020.
Justin Sun’s Shopping Spree Continues with Steemit Acquisition
On February 14, 2020, Justin Sun acquired Steemit, the largest decentralized blockchain-based social
media and blogging platform, built on top of the Steem blockchain. This acquisition added to TRON’s
growing ecosystem, consisting of BitTorrent, the largest decentralized file-sharing system, and DLive,
the largest decentralized live streaming platform.
The initial announcement of the partnership generated significant buzz as tweet volume hit a quarterly
high of 593 tweets. Price also rose to a quarterly high, surging 11.6% intraday.
Things quickly went south. As part of the Steemit acquisition, Justin Sun acquired a large number of
Steem tokens. Concerned that TRON and Sun might centralize control over the network, the Steem
community moved to implement a soft fork on February 24 to deactivate the voting power of the
tokens controlled by Sun and TRON.
/ 41
Q1 2020
Sun responded by attempting a hostile takeover of the Steem network, with help from crypto
exchanges Binance and Huobi, in an effort to maintain Sun’s control of the network. While those
exchanges ultimately backed down and apologized for their actions, the move by TRON left a sour
taste in the mouths of members of the Steem community.
Members of the steem community responded by hard-forking the steem network and creating a new
blockchain called Hive. They also produced a new decentralized blogging platform called hive.io. All of
the tokens were ported over to the new network with the exception of those from the original
development fund controlled by Steem (now owned by Sun).
The drama created by Sun largely landed negatively with digital asset investors. TRON saw a 56% drop
following the Steemit acquisition (February 14. Prior to the acquisition, TRON had risen by 98% since
the beginning of the quarter. Despite the high level of drama, TRON also saw by far the most
significant decline in 30 day average tweet volume (-41% relative to any digital asset available for
trading on eToro US. TRON ended the quarter with its lowest average tweet volume since 2017.
TRON’s Tweet Volume peaked on February 6th following the Buffet lunch
and February 14th after the Steemit acquisition
/ 42
Q1 2020
XRP  Summary 3,276,546 54.52% 100%

Price Change vs. USD 9.51% Tweet Volume Change 4%

Open $0.1929 2,681 Sats) Max Tweet Volume 7,864 Feb 13
Close $0.1746 2,739 Sats) Min Tweet Volume 2,596 Mar 21
NOTABLE NARRATIVES
Lawsuit Accuses Ripple CEO of Touting XRP While Silently Liquidating Holdings
MoneyGram Got Another $11M From Ripple to Use Its Cross-Border Payments Tech
Ripple Strengthens Presence in Asia with Fintech DeeMoney
Intermex is Not Using Ripple for its Mexican Remittances
Amended Lawsuit Against Ripple Now Offers Theory That XRP May Not Be a Security
/ 43
Q1 2020
XRP Army Can’t Help Continued XRP Price Declines
XRP Army Shrinks Modestly, Q over Q

Over the first quarter of 2020, the number of Twitter users discussing XRP fell by 16% and price
declined by 9.51% (a relative 2.14% outperformance vs. Bitcoin). The number of Twitter users in the
“XRP Army” (the name given to the cryptocurrency’s supporters) has fallen by more than 50% since
October 2018 and declined by over 82% since January 2018 highs. For comparison, the number of
Twitter users discussing Bitcoin dropped by 58% from all-time highs.
Liquidations of XRP Keep Ripple in the Green

Ripple’s (the firm behind XRP CEO, Brad Garlinghouse, spoke to the Financial Times (Link) in February,
noting that the firm relied on XRP liquidations to stay cash-flow positive. While Ripple liquidated only
$13M worth of its XRP holdings in Q4 2019 (the least in three years), it sold over $250M worth in Q3 of
last year. It is not yet known how much XRP Ripple sold in Q1 2020.
/ 44
Q1 2020
Zcash - Summary 124,138 1.67% 99%

Price Change vs. USD 12.49% Tweet Volume Change 29.9%

Open $27.63 0.00384 BTC Max Tweet Volume 484 Jan 30
Close $31.03 0.00488 BTC Min Tweet Volume 71 Mar 24
NOTABLE NARRATIVES
Zcash’s Funding Vote and the Woes of Decentralized Governance
WATCH Zcash Foundation Explains ‘Compromise’ Path to Funding ZEC Development
Zcash Reward-Distribution Vote Questioned as Only a Small Sample Took Part
Zcash Poised to Finally Have Private Transactions on Mobile with SDK Release
Introducing Heartwood
/ 45
Q1 2020
Privacy is a Growing Narrative in the Digital Asset Space
Privacy Mentions Surged in Early Q1

In mid-January, mentions of privacy in digital asset headlines reached their apex. Zcash and Monero
(both privacy focused digital assets) surged in price and Litecoin made progress on implementing
Mimblewimble transactions for added privacy.
Zcash surged by 12.49% vs. USD over Q1 and 26.97% vs. Bitcoin. Litecoin, with its new focus on
privacy, outperformed Bitcoin by 8.97%. Monero was up 4.61% on the quarter.
While larger privacy-focused

altcoins surged, smaller
privacy coins saw significant
drop offs in the second half
of the quarter. Horizen
dropped by 33%, Grin by
52%, and Komodo by 28%.
Privacy Focused Coins Have Significantly More Decentralized Conversations
The largest privacy coins (ZEC, XMR, ZEN, GRIN, KMD by market cap saw a significantly higher
percentage of tweets coming from unique Twitter accounts than the largest cryptocurrencies by
market cap. All privacy coins saw at least
73% of their tweets coming from
unique Twitter accounts by the end
of the quarter. In comparison, the
highest percentage coming from a
large cap cryptocurrency was
bitcoin cash at just 62%.
The two largest privacy coins

experienced very similar patterns,
with Monero ending the quarter
with 73% of tweets coming from
unique accounts, and Zcash at
74%.
/ 46
Q1 2020
Quarterly Contributors
The Quarterly Contributor Series covers three unique cryptocurrency narratives from the past quarter,
written by leading experts in the field of digital assets. This quarter's contributors are Sacha Ghebali
and Anastasia Melachrinos from Kaiko, Kevin Kelly from Delphi Digital, and John Todaro from
TradeBlock.

By: Sacha Ghebali and Anastasia Melachrinos

By: Kevin Kelly
Bitcoin Mining and the Halving

By: John Todaro
/ 47
Q1 2020

By: Sacha Ghebali & Anastasia Melachrinos
As crypto market infrastructure was put to the test when prices started
plummeting on March 12, dislocations are reshaping the landscape and
fueling rapid improvements of the crypto trading ecosystem.
A Breach in the Safe-Haven Narrative

Bitcoin has been touted as a safe-haven asset for investors, as an asset that would hold its value and
be uncorrelated to market collapse. However, the strong correlation between market returns and
BTC/USD returns indicates that there can be a strong relation between the two afterall. An explanation
may be sought in the fundamental value that cryptocurrencies bring to the table: the promise of
alternative or complementary financial infrastructure with unparalleled network effects.
This value is dependent on the minds and hands of smart engineers, investors, businessmen, and
academics laying out the technical foundations. All these are being impacted by COVID19, therefore
potentially reducing the expected value being created. The question of how large this correction
should be remains unanswered, but it presents a simple mechanism by which market returns can
correlate with cryptocurrency returns.
/ 48
Q1 2020
The Deadly Liquidation Spiral
The crypto-market crash, now referred to as

“Black Thursday,” occurred in two phases on
March 12. The first started around 10am and the
second around 11pm UTC time.
After an initial journey to rapid recovery following

the first crash, prices began to fall without a
recovery in liquidity levels. The combination of a
lack of liquidity, falling prices, and a series of
automatic liquidations coming from leveraged
accounts made for an explosive mix that
decimated the order books (cf. figure below
showing how severely the market depth was
impacted during the crash).
Intense Trading and Infrastructure Response
The mechanisms at play described in the previous paragraph (rooted in automatic asset liquidation)
are not unfamiliar to traditional markets, with the difference that unregulated markets do not
necessarily have circuit-breakers in place to halt trading at times when investors need some slack to
calmly gather their thoughts to effectively contribute to price discovery. Thus, the market crash has
led to healthy — albeit sometimes heated — discussions on the responsibilities of exchanges and
measures that should be taken on how to introduce circuit breakers to limit such instabilities.
The intense trading activity

that was generated on the
day of the crash was an order
of magnitude greater than
usual. This presented
challenges as all systems
were being pushed to their
limits to handle the sharp
surge in activity, causing
some exchanges to go under
unexpected maintenance,
which, in effect, acted as
implicit circuit breakers.
/ 49
Q2 2020
Stablecoin Stability Put to the Test

As many cryptocurrency traders know, it is wildly common for crypto traders to inject funds on
exchanges in fiat currency, then store and make the capital flow in the form of stablecoins. This is
because they are easier to transfer between or redeem from exchange platforms.
As the figure shows, the hourly

exchange rates of stablecoins
can deviate significantly from
the equilibrium unit value of 1
USD. This comes as an effect
of holders of stablecoins
bearing some form of credit
risk, which is contingent on the
adequate backing or
stabilization mechanism of the
underlying currency.
A Surge in Volatility Across the Board
This will be a good year for high-frequency traders and market makers, both in traditional finance as
well as crypto. The steep increase in volatility created myriad mispricing opportunities coming from
investors' reaction time, as well as behavioral biases amplified by panic strikes. The intense fear
among investors was reflected in the VIX index hitting levels it hadn’t reached since the 2008 crisis.
The chart shows that the 30-

day historical volatility of
Bitcoin skyrocketed on March
12 to about three times the
volatility of the S&P 500. It is to
be noted that the current
historical volatility of the S&P
500 has reached about twice
the average volatility of Bitcoin
in early 2020. Coincidently,
Black Thursday took place just
as the historical volatility of the
S&P 500 was about to touch
that of Bitcoin.
/ 50
Q2 2020
State of the Market and Recovery

During the crypto market crash, order book spreads saw a 10-fold increase. A first peak took place
over the first part of the crash on March 12. Then the recovery started, but the second collapse hit
harder. Spreads only started to recover to early-March levels toward the end of March, as shown on
the average hourly spread in the figure below.
A Surge in Volatility Across the Board
Conclusion
The March 12 cryptocurrency market crash occurred in two successive steps. The second drop,
precipitated by automatic liquidations, imparted a long-lasting effect on the market structure.
Correlations to gold and the stock market have soared, and markets are multiple times more volatile
than a month ago.
As of the end of March, the spreads are only starting to recover to the early-March levels.
/ 51
Q1 2020

By: Kevin Kelly
We’re on the verge of a major global recession. Financial markets are a bloodbath, policymakers in
every corner of the world are racing to unload “stimulus” packages the likes of which we’ve never
seen, yet Bitcoin is trading at the same level it was 18 months ago. What gives?
Bloodied and beaten, many investors have been left wandering aimlessly on the street as the fallout
from COVID19 worsens. The speed and severity of the virus’ outbreak set off a chain reaction in
financial markets, resulting in one of the worst quarters for asset prices since the financial crisis more
than a decade ago. The depth of economic consequences is still largely unknown, but for those
keeping score at home, here’s a few truths about Q1 we do know.
The S&P 500 experienced its fastest 20% drop from an all-time high in its history, ending the longest
bull market in history. Latin American equities lost more than 45% of their value in dollar terms. Oil
prices collapsed 66% in Q1, marking the worst quarter for crude on record. Liquidity evaporated as
volatility across asset classes blew out. The VIX Index (often called the “Fear Gauge”) closed at a
record high a couple weeks ago, surpassing even its 2008 peak. Long story short, unless you parked
yourself in cash or U.S. Treasuries, odds are you left Q1 far worse than you entered it.
Like most assets, Bitcoin suffered a

significant drawdown amidst all the
market turmoil as investors shed
risk and flocked to cash. The world’s
largest crypto asset experienced
one of its fastest major corrections
in March, dropping 50% at one point
and pushing BTC’s price below $5k
for the first time since April 2019 
several hundred million dollars’
worth of sell liquidations (Link)
certainly didn’t help. Bitcoin vs. Drawdown from 52Week Highs
/ 52
Q1 2020
As we know, Bitcoin’s track

record is rather limited, but it’s
important to note we’ve seen
BTC sell-off dramatically in
prior periods of heightened
market volatility.
Bitcoin vs. Inverted VIX Index (14Week Average)
Bitcoin’s sizable drawdown has caused many to throw in the towel, citing its inability to serve as a true
macro hedge (despite still outperforming risk assets by a considerable margin year-to-date, but I
digress). Aren’t these the exact conditions Bitcoin was built to thrive in? Well, yes and no.
For starters, there are few asset classes

(or individual assets for that matter) that
see their price appreciate in absolute
terms during a liquidity crisis. The price
of gold, for example, fell 30% between
March and October 2008, as stocks
cratered at the height of the financial
29.54% crisis. Fast forward to a few weeks ago
when we saw the precious metal drop
~15% at one point as the sell-off in
Gold vs. S&P 500 20082009 equities began to accelerate.
Granted, that pales in comparison to BTC’s price plunge, but that’s to be expected. Bitcoin is far more
volatile than gold, both on the upside and downside (if you want asymmetric return potential, it doesn’t
come free). In our view, Bitcoin’s performance following the aftermath is far more important than its
sell-off going in, given the backdrop has never been more conducive for a non-sovereign,
censorship resistant, provably scarce digital asset.
Policymakers have approved massive economic relief packages totaling more than $10 trillion in both
monetary and fiscal “stimulus” to combat the impact of COVID19, as political leaders are forced to rip
up the fiscal rulebook to save their economies from financial ruin. Similarly, major central banks stand
armed and ready to soak up any excess debt issuance required to fund such aggressive fiscal
spending in order to keep rates low and financial conditions at least somewhat accommodative.
/ 53
Q1 2020
The Federal Reserve’s balance sheet, for example, is rapidly approaching $6 trillion after breaching $5
trillion for the first time in late March. The U.S. central bank also expanded its menu of asset purchases
to include high-grade corporate debt amid rising concerns over corporate solvency. Across the
Atlantic, the European Central Bank lifted its self-imposed limit on the amount of sovereign debt it can
purchase from any single country, encouraging its members to spend more than they’d otherwise
consider without such backstop. Likewise, the Bank of Japan — the poster child of quantitative easing
— is showing no signs of slowing its seemingly indefinite asset purchase program. That doesn’t include
the People’s Bank of China, the Bank of England, the Bank of Canada, the Reserve Bank of Australia, or
the 60-rate cuts by global central banks in 2020 alone.
The backdrop for massive debt

monetization is set and it appears all
the usual suspects are making their
way to the stage.
Historical precedent is quite limited given

Bitcoin’s relatively short lifespan, but it is
notable that prior BTC cycles have tended
to peak with major central bank balance
sheet growth.
* For NTM metric in chart: Next 12M estimates Bitcoin Price vs. Total Asset Growth of Major Central
= 25% year-over-year total asset growth Banks (YoY %
Large-scale asset purchases and weakening growth expectations can keep a lid on historically low real
rates, bolstering the investment case for non-income producing assets like Bitcoin or gold even
further.
Bitcoin vs. 10Year U.S. Treasury Real Yields (Inverse)
/ 54
Q1 2020
Finally, establishing “fundamental” indicators in crypto is as much an art form as it is a science, but we
believe the sell-off in BTC has provided an attractive entry point for those with conviction in its long-
term value proposition. For example, the market-value-to-realized-value ratio (MVRV, which
compares the value of Bitcoin relative to the estimated cost paid for all coins in existence, dipped
below one in March for the first time since early April 2019. Extreme values in this indicator have
signaled prior peaks and troughs, usually following significant moves in BTC’s price.
Bitcoin vs. Realized Price & MVRV Ratio
/ 55
Q1 2020
The Upcoming Bitcoin Network Halving and

Miner Profitability
By: John Todaro
The Bitcoin network halving is a pre-set inflation adjustment in the network that occurs every four
years. The next halving will occur at block height 630,000, or approximately mid-May 2020, which
would see the new issuance supply of Bitcoin decline by 50%. As the new issuance supply of Bitcoin
falls, the scarcity of the asset increases.
The prior two halvings, which occurred in 2012 and 2016, offer indicators for mining activity, including
mining profitability, around the upcoming 2020 halving. The network hash rate is closely related to
miners’ profit margins. The hash rate increases as the number of resources, in aggregate, committed
to securing the network through mining activities rises. As resources dedicated to mining rise over
time, the network difficulty increases, which drives efficiency gains in mining activity and/or increased
mining costs. As such, in order to maintain healthy profit margins for miners, a rising hash rate is
typically needed to correspond with a rising Bitcoin price.
Network Mining Difficulty is a measure of how time consuming it is for

miners to “find” new blocks. Unlike metals mining, the Bitcoin network is
designed so that the same number of Bitcoin are mined every year,
regardless of the mining resources committed. As firms dedicate more
resources to mining Bitcoin, the difficulty rate adjusts to a higher level to
ensure that miners still only mine one block approximately every ten
minutes. Similarly, if miners dedicate fewer resources to mining, the
difficulty rate adjusts lower to ensure the same new supply rate of
Bitcoin.
/ 56
Q1 2020
We compare mining profit margins and breakevens between the 2012 and 2016 halvings and our
projections for the 2020 halving, given the known hash rates around prior halvings and the estimated
hash rate for the upcoming halving. In the past two halvings, the price of Bitcoin rose to levels higher
than mining breakevens, allowing miners to maintain similar profit margins before and after the
halvings, despite the 50% reduction in mining rewards.
VA L U E 2012 2016 2020

Pre/Post-Halving Pre Post Pre Post Pre Post
Hash Rate 16 TH/s 25 TH/s 1,250 PH/s 1,580 PH/s 110 EH/s 135 EH/s
Coinbase Reward (BTC 50.00 25.00 25.00 12.50 12.50 6.25
Breakeven Cost ($ 4.45 12.68 217.00 453.00 7,300.00 15,100.00
Bitcoin Market Price ($ 9.50 13.50 420.00 680.00 6,300.00 N/A
Gross Profit (% 53.16 6.07 48.33 33.38 15.87 N/A
2020 has proven to be a turbulent year so far for financial markets. While Bitcoin miners maintained
healthy profit margins in the beginning of the year, a COVID19-inspired sell-off pushed mining
profitability into the red. In response to a decreasing hash rate, the Bitcoin network difficulty declined
in its second largest drop in history, allowing miners to move back into positive territory. As the quarter
came to a close, Bitcoin prices recovered some losses suffered earlier in March, allowing miners to
increase their profit margins. In the figure below we diagram estimated mining profitability over time
alongside TradeBlock’s XBX Bitcoin Index.
/ 57
Q1 2020
eToro CopyTrader™ Spotlight
eToro’s award-winning social trading features let users discuss trading strategy, practice with virtual
funds, and even copy the trades of other users.
CopyTraderTM lets you automatically copy the trading actions of top traders on eToro. Simply browse
through a list of traders to view their status, and when you find one or more you’d like to copy, just hit
Copy. You’ll be prompted to allocate funds to mirroring their portfolio and the trades they make. This
all happens in real time — so you’ll act like an experienced trader, without having to do the work of
one.
Learn More about CopyTrader
/ 58
Q1 2020

Nicholas Merten - DataDash
Nicholas Merten is the founder of DataDash, the largest cryptocurrency

YouTube channel, with over 330,000 subscribers.
eToro CopyTrader Profile: NicholasMerten
How did your portfolio allocation between different assets change over the quarter? Did
your allocation to cryptocurrency change at all?
I made a good call getting out of equities in October of 2018  that’s when I officially flipped bearish
on equities. So, I haven’t seen too much change, more than anything though, I am setting aside a cash
reserve for basically the bottom in equities(...) it’s a pretty wide time frame depending on how
COVID19 plays out.
I am not a short-term trader when it comes to crypto. I focus much more as a macro trader, swing
trader, so my positions at a minimum are usually going to be held for a multitude of months to a couple
of years.
Did you expect digital assets to trend downwards alongside equities?

I think there is an easy explanation, which is why I wouldn’t say they’re directly correlated. As equities
as a much broader market started to experience a correction I think we got to a point where people
were now basically short on the ability to get positions in dollars(... This was the worst sell-off we
have ever seen in stock market history in the sense of the severity and pace of the sell-off and the
increase in volatility. I think that’s going to be reflected in just about any market. We saw in gold and
silver, for example, a stark decline even though these are time-tested assets that hedge against
market fear. So I think this was a broad demand for dollars at a time where there wasn’t much available
dollars on the market.
A lot of people forget when you’re trading against a dollar pair and you sell a stock or sell Bitcoin,
you’re taking a net long position on the dollar. If an equity or Bitcoin drops 50% your dollar can now
purchase twice as much of that asset so I think at the end of the day people didn’t realize how much
there was a lack of liquidity in the system.
/ 59
Q1 2020
Was the “Bitcoin as a hedge against macroeconomic uncertainty” narrative proven false?
I don’t think it was per se proven false(...) luckily we’ve regained very similarly to gold. At the end of
the day I don’t want to say I am too confident that it is a hedging asset, I think we’re going to have to
see that over the next two years and I think it’s really going to come into fruition after the halving
event.
If you talk about the trillions of dollars stored in currency markets, equity markets, property markets,
and traditional bonds that are flowing out due to risk avoidance, you may see a fraction of that going
to Bitcoin.
What advice would you give to someone outside of cryptocurrency that is looking to learn
more about this market?
I am someone who is actually quite different than most in saying that you don’t have to fully,
technically understand Bitcoin. I would assume that the vast majority of people investing in stocks
don’t look at the full books of every company that they invest in; they don’t understand every single
business practice, and that’s the same with Bitcoin. You have to generally have a decent
understanding I think if you want to invest in Bitcoin and digital assets. The key thing to understand is
that these assets are limited in nature — they are traceable, they are transparent, and they are
trustless to a large degree compared to traditional assets. Bitcoin has operated for the last ten years
without a failure, never shutting down as a network, provides it to be a very reliable asset in that case.
What were your best calls and biggest mistakes as a trader this quarter?
On some of my altcoin positions the biggest mistake I made was not having stops set on many of my
positions that had gained over the last couple of months. We saw just as much of a bloodbath in the
altcoin space as we did with Bitcoin.
I was planning on holding them

for the longer term, but in
reality at the end of the day it’s
better to take profits because
you could see within just two
weeks a lot of those gains get
wiped away that you had built
up over the past few months,
and that’s really just how
crypto markets can move
sometimes.
Nicholas Merten’s CopyTrader Performance on eToro
/ 60
Q1 2020

Bryce Paul and Aaron Malone - Crypto 101
Bryce Paul and Aaron Malone are the Co-Founders of Crypto 101, a top
podcast for cryptocurrency beginners and experienced traders alike.
They are also the co-authors of Crypto Revolution.
eToro CopyTrader Profiles: crypto101_bryce and crypto101_aaron
How did the macroeconomic climate this past quarter affect how you traded?
Bryce: The macroeconomic climate really turned me risk-off. The entire economy has come to a little
bit of a standstill. But what is really interesting is the VIX hit an all-time high… basically the price of
insurance for your stock options. The fact that the price of insurance is so high means that nobody
knows how to quantify the risk we’ve been exposed to and quantify the forward value of these
companies. We don’t know how bad the economy really is.
For me it is mostly cash is king until the VIX drops down to where it normally is between 15 and 22. In
my opinion, crypto assets have been tightly correlated with other risk-on assets and I think that the
whole safe-haven risk-off narrative right now is invalid. In the future, it will be that — it was born to be
that — but right now it tracks very closely with other risk-on assets.
Aaron: The entire quarter has actually been phenomenal, when you look since January there have
actually been a lot of coins that have gone up 2x, 3x, before the great collapse when PlusToken
dumped all of their supply and knocked us down to $3K4K Bitcoin prices). While it has been a rough
year for holding, for trading this volatility has been phenomenal.
How did your portfolio allocation between different assets change over the quarter? Did
your allocation to cryptocurrency change at all?
Aaron: I’m actually more into crypto now than I was before. I was definitely in cash towards the
beginning of this year and just slowly crept things in. I thought because we were above $10K it was a
bit too soon, and I’ve kind of just been dollar-cost averaging this whole way down.
/ 61
Q1 2020
Bryce: I like to set my sells at previous resistances to get the rebound. I didn’t get as much sells as I
would have liked, I’ve been in this industry for so long that I haven’t put fresh cash in this market for a
while. The first time I really thought about it was that Thursday, when I woke up and saw Bitcoin at
$3,800 and was like “you’ve got to be kidding me”. I am so comfortable with my crypto exposure that I
am just along to enjoy the ride. I picked up a lot of Dash on that fall, because of the Dash halving
coming up in April. I converted a lot of Bitcoin into Dash.
One of the things I like to think about is the divergence between price and value. Price is what you pay,
value is what you get. The networks have only gotten stronger and more liquidity behind them,
everything has grown, but the price is the same that it has been for 34 years. It just goes to show that
there is a divergence between price and value. When I see a value buy like that I have a hard time
resisting.
Did you expect digital assets to trend downwards alongside equities? Was the “Bitcoin as a
risk-off asset and a hedge against macroeconomic uncertainty” narrative proven false?
Aaron: I feel like that was a black swan event in and of itself. Just like the 40% rise was earlier last year
when President Xi announced that China was going to be investing in blockchain, but what also
happened that day was the CME closed. So, when these two events correlated, they just went on top
of each other. A bunch of algorithms and FOMO just kicked in and shot things through the roof. The
same thing happened on Bloody Thursday where you’ve got the stock market uncertainty, coronavirus
stuff, and PlusToken which stole a bunch of tokens and had nothing invested in it and wanted to get
out when the going is good, which triggered a series of events spiraling us down. But our faith didn’t
die whatsoever, if anything we were getting giddy, we were getting excited and we got on the phone
with our grins growing bigger and bigger going “oh my god, I can’t believe we have a chance to buy at
these prices”. This is the biggest fake news event of the year — that Bitcoin is not sustainable as a risk
off asset. That’s nonsense. It hasn’t followed stocks and is largely decoupling itself. Bitcoin does not
have to follow stocks; there are no earnings reports, customers, orders to fill. It exists outside of
traditional macroeconomic conditions.
Bryce: When we were first started out no one compared it to another asset like the stock market, we
compared it to the dollar. Now we’re seeing the narrative take shape from currency and currency
valuation analogs, to now asset analogs. We’re seeing a complete overhaul in the narrative in crypto
amidst all this stuff.
/ 62
Q1 2020
Crypto needs to prove itself, it needs to be around, and it needs to survive the coronavirus liquidity
crisis that we are experiencing now. It is still in jeopardy. Right now everyone is selling everything to
service their debt, pay their tax liability, and their rent. The economy is at the point of maximum selling.
But crypto will survive, there are people that will never sell. Once we survive this pinch point and we
move from panic sellers to long-term holders, Bitcoin will see great success in the near-term.
What were your best calls and biggest mistakes as a trader this quarter?
Aaron: I took a loan against some of my crypto holdings and bought Bitcoin below $4,000 and am up
30% once accounting for paying back that loan. Easily my best move this year. My worst trade was
buying levered longs at $8K leading up to the Bitcoin halving, and getting completely liquidated on
Bloody Thursday. I am definitely out of levered trades and futures for the time being.
Aaron Malone’s CopyTrader Performance on eToro
Bryce: My best
trade: I put a big
chunk of Bitcoin into
Dash. My worst
trade was not selling
Tezos at $4 when I
bought in at $1.20. I
got burned for
getting greedy. The
worst trades are just
not selling the short
term swing highs.
Bryce Paul’s CopyTrader Performance on eToro
/ 63
The State of
Digital Assets
Q1 2020
FOLLOW US ON TWITTER
@eToroUS TheTIEio
Caroline Baker
MEDIA INQUIRIES US Communications & PR Lead
carolineba@etoro.com

The TIE Quarterly - EToro

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The State of

A Message from eToro USA

About eToro USA

A Message from The TIE

About The TIE

Structure of the Report

About the Data

The Crypto Market is Highly (but Not Perfectly) Correlated

Individual Asset Pages 4

Bitcoin - Summary 8,536,493 35.10% 97%

QUARTERLY PRICE METRICS QUARTERLY SENTIMENT METRICS

Price Change vs. USD 11.41% Tweet Volume Change 47%

The Aftermath of the March 12th Crash

The Macro Narrative for Bitcoin is Far from Dead

The Upcoming Bitcoin Network Halving and Miner Profitability

Coronavirus has Become the Dominant Narrative for Bitcoin

Coronavirus Takes the Stage

Relative Mentions in Crypto Publications: Coronavirus vs. The Halvening

Bitcoin’s Market Cap Dominance Remains High

What is market cap dominance?

The History of Bitcoin’s Market Cap Dominance

Q1 2020 Market Cap Dominance

In Depth: The Digital Gold

Born During the 20082009 Financial Crisis

Mentions of Gold in Bitcoin Headlines Hit New Highs

Sentiment Correlation: Bitcoin, Gold, and S&P 500

Bitcoin and Gold Sentiment Highly Correlated in March 2020

Bitcoin Outperforms S&P 500 in Q1 2020

Bitcoin and Gold Sentiment Became Highly Correlated

Bitcoin Cash - Summary

QUARTERLY PRICE METRICS QUARTERLY SENTIMENT METRICS

Price Change vs. USD 6.25% Tweet Volume Change 23%

Bitcoin Cash Will Avoid Chain Split as Mining Tax Dies

US Judge Dismisses Bitcoin Cash ‘Hijack’ Lawsuit Against Bitmain, Kraken

Bitcoin Cash is Halving Too — Does Anyone Care?

Bitcoin Cash Block Reward Reduction

January 1, 2019 to 8 Days Before September 4, 2019 to 8 Days Before

Ethereum 48.06% Ethereum 23.87%

Cardano - Summary 317,553 7.62% 100%

QUARTERLY PRICE METRICS QUARTERLY SENTIMENT METRICS

Price Change vs. USD 6.94% Tweet Volume Change 7.46%

Cardano Community Outraged by Cardano Staking Cartel in Shelley Testnet

Cardano (ADA Foundation Engages in Decentralized Computing Effort to Fight COVID19

Fintech Think Tank Takes Legal Action Against Cardano Foundation

Cardano to Roll Out Commercial Infrastructure, Denies Coronavirus Delay

Cardano’s Share of the Overall Crypto Market has Fallen 10x

Cardano’s Market Cap Dominance Drops Significantly

Dash - Summary 648,779 8.53% 99%

QUARTERLY PRICE METRICS QUARTERLY SENTIMENT METRICS

Price Change vs. USD 58.17% Tweet Volume Change 60.97%

Announcing the Release of Dash Platform v0.11

Bitcoin and Dash Spike Following Venezuela Internet Shutdown

The Prices of Digital Assets Were Highly Correlated

Dash Daily Price Changes Were the Least Correlated

Q1 2020 Daily Price Change Correlations

Large Cap Daily Price Change Correlations

EOS  Summary 232,398 6.01% 99%

QUARTERLY PRICE METRICS QUARTERLY SENTIMENT METRICS

Price Change vs. USD 13.95% Tweet Volume Change 39%

Block.one CEO Criticizes EOS Worker Proposal System

Coinbase, EOS Community Clash Over Supposed ‘Degraded Performance’

Block.One Voice Social Network Beta Goes Live

EOS Tweets Are Increasingly Coming from the Same Accounts