Digital Assets Industry Report September 2018

Transcription

1 Digital Assets Industry Report September 2018

2 Introduction The Digital Asset Industry Report is a monthly report that summarizes major developments in the cryptocurrency industry and provides a snapshot of the largest 15 digital assets in the market as represented in our CTF15 strategy. Our goal is to provide readers with a timely update on industry events and crypto asset performance to enable them to make informed investment decisions. BlockState AG is a financial technology firm based in Zug, Switzerland, specialized in digital assets and distributed ledger technology. We provide infrastructure and product solutions across a wide range of digital assets. BlockState Digital Asset Management is a pioneer in the European crypto asset management industry. Our investment products provide secure and compliant access to digital assets. Our flagship product, the CTF15, is the first truly diversified, fully transparent and rules-based investment products that offers a smart and secure way to invest in the top 15 crypto assets. 2

3 Table of content 01 Monthly Performance Review Page Top 15 Crypto Assets Page Appendix Page 33 46

4 Monthly performance review

5 Industry News Ripple soars over 100% in one week. Ripple has had one of its strongest weeks this year. While there was not a single particular news event that explained this rise, it is believed that investors turned bullish in light of the Ripple s upcoming annual Swell conference and the planned roll out of xrapid, Ripple s international payment system. US regulatory debate continues. A Ohio Senator hosted a conference with over 50 senior attendees from the Crypto currency industry to discuss future developments in the US. The main topic was regulation and how to create an environment that fosters innovation. One main concern of the industry was the SEC s conservative approach to cryptos. LINE launches own token economy to build cocreation economy. LINE, a mobile messaging and social media platform with a large Asian, and also global, user base, announced the creation of its own blockchain based network using its own crypto currency LINK. They want to promote co-creation of content by providers and users and enable mutual growth. The platform will go live in Q4 this year. First Crypto game to launch on Tron network. Tron announced the upcoming launch of the first video game on its platform, developed by BitGuild, which will have its own crypto currency based on the TRX20 token, which will allow players to freely trade and exchange in-game assets. The project will provide insights into future possibilities offered by blockchain to the gaming industry. 5

6 Billions Market Capitalisation 900 Market Capitalisation of Global Crypto Assets Source: Directly from respective Blockchain. Period shown from to Rank % of total Token Market Cap as of market cap 1 BTC 121,471,295, % 2 ETH 28,824,991, % 3 XRP 13,295,224, % 4 BCH 9,423,372, % 5 EOS 5,833,687, % 6 XLM 4,173,490, % 7 LTC 3,586,539, % 8 UST 2,746,792, % 9 ADA 2,641,369, % 10 IOT 1,982,336, % 11 XMR 1,903,090, % 12 TRX 1,668,865, % 13 DSH 1,612,695, % 14 ETC 1,344,295, % 15 NEO 1,313,908, % CTF15 201,821,956, % Total market 228,519,875,837 6

7 Monthly Returns Date Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 1 year BTC 50% 64% 45% -32% 6% -34% 31% -21% -16% 29% -14% -4% 61% ETH 3% 45% 68% 46% -20% -55% 74% -17% -22% 2% -38% -19% -23% XRP 4% 25% 630% -37% -18% -45% 67% -30% -24% -5% -24% 62% 178% BCH 1% 215% 93% -46% -16% -41% 95% -30% -26% 10% -34% 5% 27% EOS -10% 285% 239% 22% -25% -31% 254% -43% -35% -3% -19% -5% 617% XLM 130% 128% 288% 87% -31% -46% 136% -37% -34% 53% -25% 18% 1795% LTC 5% 59% 183% -35% 33% -46% 28% -23% -32% 2% -26% 4% 18% ADA 277% 333% 11% -38% -56% 144% -40% -40% 17% -34% -14% 195% UST -1% 2% 0% -2% 1% 0% 0% 0% 0% 0% 0% 0% -1% IOT -32% 226% 185% -40% -13% -44% 83% -17% -41% -1% -26% -19% -2% TRX 3% -27% 1836% 27% -18% -1% 116% -34% -39% -5% -31% -10% 684% ETC -16% 154% 9% -7% 29% -59% 51% -31% 3% 7% -24% -11% -12% XMR -9% 105% 110% -27% 9% -41% 45% -39% -17% 1% -17% 9% 23% NEO -3% 14% 108% 109% -2% -63% 77% -44% -42% 5% -38% -2% -35% DSH -16% 164% 56% -41% -10% -47% 51% -38% -23% -1% -20% 3% -42% 7

8 Returns September 2018 September was a mixed month. The market started positively, but corrected again mid month. At the end, eight currency finished weaker, while six currencies ended the month positively. Ripple was the clear outperformer, gaining over 100% over the course of a few days. While there was no specific trigger for this gain, commentators assume that Ripple s upcoming annual Swell conference and the launch of X-Rapid fueled positive expectations /Aug/ /Sep/ /Sep/2018 BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH CTF15 8

9 Volatilities 1 year rolling What stands out here is the very high volatility of young currencies. This is due to outliers, e.g. in the case of Stellar, there was one day in 2017 when the token quadrupled in value. As these currencies mature, such extreme events do not occur anymore and volatilities drop significantly. It should be noted that these tokens were not included in the CTF15 at the point in time when they exhibited the high volatility, as their market cap would not have been high enough yet. 600% 400% 200% 0% BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH Source: Directly from respective Blockchain. Minimum of 1y historical price data required. TRX currently not included due to lack of price history. 9

10 Volatilities 30 days rolling The 30 days volatility is more reactive to short term changes in prices. As we can see, the periods with significant outliers which were seen in the 1y volatility occurred from Oct 17 to Jan 18. End of September we can see XRP jumping higher. This was due to positive market news and subsequent price gain of 100%+ over a few days. 800% 600% 400% 200% 0% BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH Source: Directly from respective Blockchain. Minimum of 1y historical price data required. 10

11 Upside & Downside Volatility Interestingly, we find that the Upside Volatility is higher than Downside Volatility for crypto assets and has been the main contributor to overall volatility over the past year. So despite volatilities being high compared to other asset classes, a large part of that is good volatility. 1000% 30 Days Rolling Upside Volatility 1000% 30 Days Rolling Downside Volatility 800% 800% 600% 600% 400% 400% 200% 200% 0% BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH 0% BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO 11

12 Correlation Matrix Top 15 Crypto Assets 1 Year Correlations * BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH BTC ETC XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH 1.00 *Correlation based on daily returns from except for ADA:

13 Correlations Top 15 to Traditional Asset Classes Correlations across equities, bonds and gold remain very low. Compared to the previous month, the correlation range moved up by approximately 0.02 across equities and bonds, while decreasing by against gold. Equities: majority slightly positive between 0.19 and Bonds: majority slightly negative between 0.05 and Gold: correlations are all slightly positive between and Year Correlations* BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH Dev. Markets Equities EM Equities Global Gov. Bonds Global Corp. Bonds Gold *Correlation based on daily returns from except for ADA:

14 Billions Trading Volume Top 15 Average trading volumes rose slightly in September as markets are coming out of the summer break. In Dec 17 and Jan 18 the strong price rises in crypto assets were accompanied by strong increases in trading activity, with daily volume exceeding $30bn for the top 15 currencies. Volumes receded thereafter, but remained well above 10bn on average per day every month since then Average Daily Trading Volume (ADTV) 5 - Source: Coin Metrics Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 14

15 Trading Volume Top 15 With the exception of IOT and ETC, all top 15 crypto assets increased their absolute trading volume in September. The outstanding single asset is Ripple, which tripled its absolute ADTV, as can be seen in the below chart which shows that Ripple doubled its market share in September from 2.4% to 6%. 100% Top 15 Trading Volume 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Source: Coin Metrics 15

16 Top 15 Digital Assets

17 Millions 1. Bitcoin (BTC) The most popular cryptocurrency with the highest market cap Type: Currency Token Main application: Decentralised, public payments Inception: January 2009 Unique characteristics: First Blockchain based crypto currency Currency with largest established user base 50%+ market capitalization of all crypto assets Market cap: USD 121.5bn Circulating supply: 17.3mn Maximum supply: 21mn Emission rate: decreasing over time, based on algorithm Transactions per second: ~7 Block processing time: ~10min 35 Network Value-to-Transaction Ratio 30,000 Exchange Volume (USD) ,000 20,000 15,000 10,000 5, /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts - 01/10/ /03/ /08/

18 Millions 2. Ethereum (ETH) Blockchain based technology platform for developing third party applications Type: Platform Token Main application(s): DAPs, DAOs, smart-contracts Inception: July 2015 Unique Characteristics: First platform of its kind allowing DAPs, DAOs and smart contracts Platform with largest client base Market Cap: USD 28.8bn Circulating supply: 102.3mn Maximum supply: uncapped Emission rate: based on network activity Transactions per second: ~15 Block processing time: ~15sec Network Value-to-Transaction Ratio Exchange Volume (USD) /09/ /09/ /09/ /09/ ,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000-01/10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 18

19 Millions 3. Ripple (XRP) Fast & cheap cross-border payment solution for institutional customers Type: Currency Token Main application: Cross-border payments Inception: August 2013 Unique Characteristics: Very fast transaction speed Low transaction costs High transaction volume, up to 1500 per second Market Cap: USD 13.3bn Circulating supply: 39.9bn Maximum supply: 100bn Emission rate: based on network activity Transactions per second: ~1500 Block processing time: ~4sec Number of Transactions* Exchange Volume (USD) /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *NVT ratio not available due to missing transaction data 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000-01/10/ /03/ /08/

20 Millions 4. Bitcoin Cash (BCH) Hard fork from Bitcoin offering greater scalability for future global adoption Type: Currency Token Main application: Decentralised payments Inception: August 2017 Unique Characteristics: Hard fork of Bitcoin Blockchain Higher block size of 32MB vs Bitcoin 1MB Adjustable mining difficulty keeps transactions costs stable during periods of varying demand Market Cap: USD 9.4bn Circulating supply: 17.4mn Maximum supply: 21mn Emission rate: decreasing over time, based on algorithm Transactions per second: ~ Block processing time: ~10min Network Value-to-Trasnaction Ratio Exchange Volume (USD) /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts 14,000 12,000 10,000 8,000 6,000 4,000 2,000-01/10/ /03/ /08/

21 Millions 5. EOS (EOS) Direct competitor of Ethereum, offering similar services with improved scale Type: Platform Token Main application(s): DAPs, DAOs, smart-contracts Inception: June 2017 Unique Characteristics: Successfully completed historic USD 4bn ICO Industrial scale decentralised applications High potential transaction volume Smart contracts Market Cap: USD 5.8bn Circulating supply: 906.2mn Maximum supply: 1000mn Emission rate: based on network activity Transactions per second: ~1-5k Block processing time: ~30sec Network Value-to-Trasnaction Ratio Exchange Volume (USD) /09/ /09/ /09/ /09/2018 6,000 5,000 4,000 3,000 2,000 1,000-01/10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 21

22 Millions 6. Stellar (XLM) Competitor of Ripple for fast & cheap cross-border transactions Type: Currency Token Main application: Cross-border payments Inception: August 2014 Unique Characteristics: Focus on individual users, Ripple more institutional Non-profit business model vs. Ripple for-profit More decentralized + open source code Market Cap: USD 4.2bn Circulating supply: 18.8bn Maximum supply: uncapped Emission rate: based on network activity Transactions per second: ~1000 Block processing time: ~4sec Network Value-to-Trasnaction Ratio /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts Exchange Volume (USD) 1,600 1,400 1,200 1, /10/ /03/ /08/

23 Millions 7. Litecoin (LTC) Digital currency offering improved processing time and capacity Type: Currency Token Main application: Decentralised payments Inception: October 2011 Unique Characteristics: Direct competitor to Bitcoin and similar currencies 4x processing time vs. Bitcoin 4x maximum coin supply vs. Bitcoin Market Cap: USD 3.6bn Circulating supply: 58.5mn Maximum supply: 80mn Emission rate: based on network activity Transactions per second: ~28 Block processing time: ~2:30min Network Value-to-Trasnaction Ratio /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts Exchange Volume (USD) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000-01/10/ /03/ /08/

24 Millions 8. Tether (USDT) First cryptocurrency to be fully pegged to another fiat currency, the USD Type: Stable Coin Main application: Reserve currency Inception: February 2015 Unique Characteristics: Supposedly backed 1:1 with USD Functions as major trading pair for most tokens Liquidity bridge between fiat currencies & cryptos Market Cap: USD 2.7bn Circulating supply: 2.8bn Maximum supply: uncapped Emission rate: based on network activity Transactions per second: depending on crypto pair Block processing time: n.a Network Value-to-Trasnaction Ratio 7,000 6,000 5,000 4,000 3,000 2,000 Exchange Volume (USD) 2 1, /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts - 01/10/ /03/ /08/

25 Millions 9. Cardano (ADA) Ethereum competitor that aims to add extra transparency and security Type: Platform Token Main application(s): DAPs*, DAOs**, smart-contracts Inception: September 2017 Unique Characteristics: 3 rd generation platform (vs. 2 nd generation Ethereum) Academically peer reviewed open source code Two layered transaction protocol Scaling potential via sidechains and sharding Network Value-to-Trasnaction Ratio 0 01/09/ /09/ /09/ /09/2018 Market Cap: USD 2.6bn Circulating supply: 25.9bn Maximum supply: 45bn Emission rate: based on network activity Transactions per second: ~10 Block processing time: ~20sec - 01/10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 1,800 1,600 1,400 1,200 1, Exchange Volume (USD) 25

26 Millions 10. IOTA (IOT) Transaction settlement and data transfer layer for the Internet of Things (IoT) Type: Utility Token Main application: Data transfer Inception: January 2014 Unique Characteristics: Uses Tangle instead of Blockchain Fast and scalable thanks to Tangle architecture Fee free Quantum secure Market Cap: USD 2.0bn Circulating supply: 2.8bn Maximum supply: 2.8bn Emission rate: No new tokens created Transactions per second: n.a. Block processing time: n.a. 2,500 Exchange Volume (USD) 2,000 1,500 1, /10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 26

27 Millions 11. Monero (XMR) Privacy coin, offers a digital payment system that provides anonymity Type: Currency Token Main application: Decentralised, private payments Inception: April 2014 Unique Characteristics: Private blockchain which offers complete privacy Dynamic block size All miners equal, no advantage using ASIC chips Market Cap: USD 1.9bn Circulating supply: 16.5mn Maximum supply: uncapped Emission rate: based on network activity Transactions per second: ~30 Block processing time: ~2min Number of Transactions* Exchange Volume (USD) /09/ /09/ /09/ /09/ /10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *NVT ratio not available due to missing transaction data 27

28 Millions 12. Tron (TRX) Platform for creating a blockchain based digital entertainment ecosystem Type: Platform Token Main application: DAPs*, DAOs**, smart-contracts Inception: September 2017 Unique Characteristics: Data fully owned by its creators Near zero transaction costs Aimed at artists and creative industries Strong backing from Investors, including Jack Ma Market Cap: USD 1.7bn Circulating supply: 65.7bn Maximum supply: 100bn Emission rate: at discretion of company Transactions per second: ~2000 Block processing time: ~15sec Network Value-to-Trasnaction Ratio Exchange Volume (USD) /09/ /09/ /09/ /09/2018 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, /10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 28

29 Millions 13. Dash (DASH) Aiming to improve on 1st generation currencies: speed, privacy, governance Type: Currency Token Main application: Decentralised payments Inception: January 2014 Unique Characteristics: Self-governing, self-funding business model InstaSend feature instant transaction processing PrivatSend full privacy for transaction Market Cap: USD 1.6bn Circulating supply: 8.4mn Maximum supply: 22mn Emission rate: based on network activity Transactions per second: ~56 Block processing time: ~2:30min Network Value-to-Trasnaction Ratio /09/ /09/ /09/ /09/2018 Source: Company webpage, CoinCheckup, BitInfoCharts Exchange Volume (USD) /10/ /03/ /08/

30 Millions 14. Ethereum Classic (ETC) Blockchain based technology platform for developing third party applications Type: Platform Token Main application(s): DAPs, DAOs, smart-contracts Inception: July 2016 Unique Characteristics: Hard fork from original Ethereum Kept the original blockchain Not backward compatible vs Ethereum Capped supply Market Cap: USD 1.3bn Circulating supply: 105mn Maximum supply: 210mn Emission rate: deflation through token burning Transactions per second: ~4 Block processing time: ~15sec Network Value-to-Trasnaction Ratio Exchange Volume (USD) /09/ /09/ /09/ /09/2018 2,000 1,800 1,600 1,400 1,200 1, /10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 30

31 Millions 15. Neo (TRX) Ethereum-like platform with strong Chinese/Asian footprint Type: Platform Token Main application: DAPs, DAOs, smart-contracts Inception: September 2017 Unique Characteristics: Regulatory compliance built into Blockchain structure Strong ecosystem: close cooperation with Chinese businesses & Government via OnChain High transaction speed Network Value-to-Trasnaction Ratio 0 01/09/ /09/ /09/ /09/2018 Market Cap: USD 1.3bn Circulating supply: 65mn Maximum supply: 100mn Emission rate: based on network activity Transactions per second: ~1000 Block processing time: ~15sec - 01/10/ /03/ /08/2018 Source: Company webpage, CoinCheckup, BitInfoCharts ; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 1,800 1,600 1,400 1,200 1, Exchange Volume (USD) 31

32 Appendix

33 Returns 1 y Cumulative /Sep/ /Dec/ /Mar/ /Jun/ /Sep/2018 BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH Source: Directly from respective Blockchain. Period shown from to

34 30 Days Rolling Upside & Downside Volatilities Bitcoin 30d Rolling Volatilities Ethereum 30d Rolling Volatilities 160% 140% 120% 100% 80% 60% 40% 20% 0% 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Downside Vol Upside Vol Downside Vol Upside Vol Ripple 30d Rolling Volatilities Bitcoin Cash 30d Rolling Volatilities 500% 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% 400% 350% 300% 250% 200% 150% 100% 50% 0% Downside Vol Upside Vol Downside Vol Upside Vol 34

35 30 Days Rolling Upside & Downside Volatilities EOS Cash 30d Rolling Volatilities Stellar 30d Rolling Volatilities 350% 300% 250% 200% 150% 100% 50% 0% 600% 500% 400% 300% 200% 100% 0% Downside Vol Upside Vol Downside Vol Upside Vol Litecoin 30d Rolling Volatilities Cardano 30d Rolling Volatilities 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% 900% 800% 700% 600% 500% 400% 300% 200% 100% 0% 35 Downside Vol Upside Vol Downside Vol Upside Vol

36 30 Days Rolling Upside & Downside Volatilities Tether 30d Rolling Volatilities IOTA 30d Rolling Volatilities 40% 35% 30% 25% 20% 15% 10% 5% 0% 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% Downside Vol Upside Vol Downside Vol Upside Vol Tron 30d Rolling Volatilities Ethereum Classic 30d Rolling Volatilities 1200% 1000% 800% 600% 400% 200% 0% 250% 200% 150% 100% 50% 0% 36 Downside Vol Upside Vol Downside Vol Upside Vol

37 30 Days Rolling Upside & Downside Volatilities Monero 30d Rolling Volatilities Neo 30d Rolling Volatilities 350% 350% 300% 300% 250% 250% 200% 200% 150% 150% 100% 100% 50% 50% 0% 0% Downside Vol Upside Vol Downside Vol Upside Vol 300% Dash 30d Rolling Volatilities 250% 200% 150% 100% 50% 0% Downside Vol Upside Vol 37

38 1 Year Rolling Correlations Bitcoin 1y rolling correlations Ethereum 1y rolling correlations Ripple 1y rolling correlations Bitcoin Cash 1y rolling correlations

39 1 Year Rolling Correlations EOS 1y rolling correlations Stellar 1y rolling correlations Litecoin 1y rolling correlations Tether 1y rolling correlations

40 1 Year Rolling Correlations IOTA 1y rolling correlations Monero 1y rolling correlations Ethereum Classic 1y rolling correlations Neo 1y rolling correlations

41 1 Year Rolling Correlations Dash 1y rolling correlations

42 30 Days Rolling Correlations BTC 30d rolling correlations ETH 30d rolling correlations XRP 30d rolling correlations Bitcoin Cash 30d rolling correlations

43 30 Days Rolling Correlations EOS 30d rolling correlations Stellar 30d rolling correlations Litecoin 30d rolling correlations Cardano 30d rolling correlations

44 30 Days Rolling Correlations Tether 30d rolling correlations IOTA 30d rolling correlations Tron 30d rolling correlations Ethereum Classic 30d rolling correlations

45 30 Days Rolling Correlations Monero 30d rolling correlations Neo 30d rolling correlations Dash 30d rolling correlations

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