Monthly Market Performance Report

Transcription

1 Monthly Market Performance Report August 2018 Market Performance First week s overview (30 th July 18 5 th August 18) (As on 5 th Aug 18) Week s end price (5 th Aug) Week s start price (30 th July) % Change Bitcoin (BTC) $7, $8, % Ethereum (ETH) $ $ % Ripple (XRP) $0.43 $ % Bitcoin Cash (BCH) $ $ % The first week of August saw the cryptocurrency fortunes turn. All the major cryptos were trading in red in the recent weeks prior to August and had seemed that the digital tokens like Bitcoin were finally coming out of a long-standing slump. BTC, which had tended to float between about $6,000 and $7,000 for many weeks, finally managed to rise up above that upper threshold, even ascending beyond $8,000. However, this rise didn t last. Every one of the top 10 digital currencies by market cap had declined in value across this week and saw around $30 billion wiped from the total market capitalization. Second week s overview (6 th August th August 18) (As on 12 th Aug 18) Week s end price (12 th Aug) Week s start price (6 th Aug) % Change Bitcoin (BTC) $6, $6, % Ethereum (ETH) $ $ % Ripple (XRP) $0.308 $ % Bitcoin Cash (BCH) $ $ % This week also brought dismal news for crypto investors. Some of the largest and most popular digital currencies in the world saw declines overall, with nearly all of the top 20 coins and tokens dipping in value. Bitcoin, which recently ascended the $8,000 mark, dropped below $7,000 on 6th August and further went down below $6500 mark towards the end of the week (12th August). All the other currencies like Ripple, Ethereum and others ended the week in red as well. Third week s overview (13 th August th August 18)

2 (As on 19 th Aug 18) Week s end price (19 th Aug) Week s start price (13 th Aug) % Change Bitcoin (BTC) $6, $6, % Ethereum (ETH) $ $ % Ripple (XRP) $0.324 $ % Bitcoin Cash (BCH) $ $ % The cryptocurrency space had recovered slightly this week. Bitcoin had moved up and down throughout the week but essentially evened out its performance, with a price of just under $6,400. Ethereum had ended the week back below $300, experiencing some of its lowest values in about a year. Other tokens fell throughout the week but posted noteworthy gains at the end of the week, including Ripple, Bitcoin cash, and EOS. Fourth week s overview (20 th August th August 18) (As on 26 th Aug 18) Week s end price (26 th Aug) Week s start price (20 th Aug) % Change Bitcoin (BTC) $6, $6, % Ethereum (ETH) $ $ % Ripple (XRP) $0.323 $ % Bitcoin Cash (BCH) $ $ % This week, the top digital currency in the world by market cap (BTC) had fallen below $6,000, after spending most of the quarter in the current range. Other digital currencies such as XRP, BCH showed no major fluctuation in price and this week seemed flat for them. However, Ethereum was down to its lowest point in about a year, trading below $280. Fifth week s overview (27 th August 18 2 nd Sep 18) (As on 26 th Aug 18) Week s end price (26 th Aug) Week s start price (20 th Aug) % Change Bitcoin (BTC) $7, $6, % Ethereum (ETH) % Ripple (XRP) % Bitcoin Cash (BCH) % Nearly all of the top 10 digital currencies by market cap finished this week with an upward price motion. Bitcoin Cash posted gains of more than 15% over the week.

3 Bitcoin's price climbed by 5% over the week, and ended the week above the $7,000 mark, a critical threshold in the minds of some investors. The only cryptocurrency in the top 10 which traded sideways or slightly down at the end of the week was Tether, according to Coinmarketcap. Monthly overview (1 st Aug st Aug 18) (As on 31 st Aug 18) Month s end price (31 st August) Month s start price (1 st August) % Change Bitcoin (BTC) $7, $7, % Ethereum (ETH) $ $ % Ripple (XRP) $0.335 $ % Bitcoin Cash (BCH) $ $ % In August, we saw the cryptocurrency market decline. The 10 biggest coins by market capitalization all lost value in the last 30 days. Bitcoin (-8.00%) was the most successful in weathering the storm, while Ethereum (-33%) experienced the biggest price drop. BTC dominance increased in comparison to July, and is currently sitting at 52.3%. The total market capitalization dropped to $225 billion, but was close to slipping below $200 billion at certain points. NANO (+65%) was a standout performer and produced an extremely impressive rally for a coin of its size. Among the top 100 coins, TaTaTu (TTU) was the biggest gainer of the month with a massive 120% increase As a whole, the month was decidedly negative from a price perspective, as 90 out of the top 100 coins dropped in value, and 81 of them lost more than 10%. Possible reasons for market movement Cryptomarket is so volatile that it is difficult to pinpoint a single factor for the market movement. However, the major movement is dependent on what s happening in the markets. Positive & Negative news in the cryptomarket The cryptomarket is news sensitive and all the happenings in the cryptomarket have an impact and leads the market either in upward or downward direction CCN suggests one possibility that over-the-counter markets for Bitcoin are significantly larger than the exchange market, and that large sell-offs have impacted the market in recent weeks, increasing volatility. When Winklevoss brothers' proposed Bitcoin ETF was rejected by the SEC for a second time, analysts speculated that this news might bring about a dip in values. However, given that the momentary dip has continued for several days beyond the headlines release, cryptocurrency enthusiasts are wondering if there may be something else at play as well. In an interview with Bloomberg, Joseph Lubin, the Co-Founder of Ethereum, said that the trader types are driving volatility in the cryptocurrency market.

4 Many speculate that institutional investors are yet to enter the market in a mainstream way due to the lack of a trusted custodian. There are many reasons for the current market movement. Neither the downward or upward trend can be attributed to one single reason. Investors need to keep a watch on market and place trades accordingly Developments over the month in the Cryptomarket 1) Apple Inc co-founder Steve Wozniak will reportedly join a cryptocurrency startup called Equi Capital, focused on investments in the digital token space. 2) Bank of America, the second-largest U.S. bank by total assets, has filed a patent, titled Block Chain Encryption Tags, with the U.S. Patent and Trademark Office. It details a system that identifies the first entered data values to a block, subsequently denoting a creator tag to such datasets and assigning them to a blockchain on a first-processed basis. 3) Firefox has announced that it will take new steps to prevent cryptojacking (the process by which malware infiltrates a victim's computer to utilize processing power to mine for digital currency which is then retained by an outside source) and other forms of illicit cryptomining in future iterations of its program. 4) An American cryptocurrency exchange, Bittrex, revealed a partnership with regulated alternative trading system firm Rialto Trading. If approved by regulators, this new partnership will provide investors with not only a new cryptocurrency trading platform but also a set of blockchain-based cryptocurrency securities as well. 5) Recently, the President of Colombia, Ivan Duque, announced his support towards cryptocurrencies at the International Congress on Information and Communication Technologies. He has invited all the cryptocurrency firms to set up their business in the country. Along with this, the President of Colombia has stated that they will not impose income tax on any of the cryptocurrency firms based in Colombia for the first 5 years. 6) Bitmain, the cryptocurrency mining chip maker, is reportedly filing for an IPO to raise about $18 billion in public markets. The valuation of the Chinese company stands at around $50 billion. 7) The first regulated Bitcoin Cash (BCH) futures market officially went live on 17th Aug 18, launched by Crypto Facilities, a U.K.-based crypto futures exchange and CME Group partner. 8) Intercontinental Exchange (ICE), the parent company to the NYSE, announced plans to launch a new crypto ecosystem called Bakkt. Among other services, ICE's new project will provide delivery of actual Bitcoin in its futures contracts; most similar contracts are settled with cash.

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6 Bitcoin (BTC) Trend Bitcoin s price fell sharply during the first two weeks of August 2018 and declined below the $6,500 support against the US Dollar. The BTC/USD pair traded as low as $5,862 and later formed a support base for an upside correction. Looking at the daily chart, the price formed a base near $6,000 and consolidated for a few days. Later, Bitcoin buyers gained traction and pushed the price above the $6,500 resistance. At the end, market recovered a bit with the price of Bitcoin remaining at $7, at the end of the month (31st Aug 18) witnessing a fall of 8% over the month. On 30th Aug 18, BTC s trading volume was 4.46 billion with an average transaction cost of $0.724 Source: CoinMarketCap

7 Ripple (XRP) Trend Ripple s price declined strongly in August 2018 and broke the crucial support at $ against the US Dollar. The XRP/USD pair was not able to settle above the $ resistance, resulting in a push below the $ support. Looking at the daily chart, the price declined sharply and broke the $ and $ support levels. The decline was such that the price spiked below the $ level before finding bids near the $ level. A new multi-month low was formed at $ and the price settled below the 21-day SMA. Later, there was a strong correction initiated and the price recovered above the $ resistance. On 31st Aug 18, XRP was trading at $0.335, witnessing a loss of 23% over the month. XRP s trading volume was 263 million with an average transaction cost of $ Source: CoinMarketCap

8 Ethereum (ETH) Trend The price of one Ethereum coin started August at $ before sinking to $ on August 14, its weakest level since September 17, Ethereum ended the month at $ which is a fall of 33% over the month. For the year, Ethereum is down around 61%. It started 2018 at $ on January 1 and rose to an all-time peak of $1, on January 13. At current levels, Ethereum has a market cap of approximately $23.6 billion, making it the world's number two cryptocoin, trailing only Bitcoin From a technical view, ETH/USD pushed above its 100-DMA close to the $285-level on the last trading day of August. However, to show that selling pressure has been exhausted, it next needs to successfully defend that level in the near-term. On 30th August, ETH s trading volume was 1.51 billion with an average transaction cost of $0.21. Source: CoinMarketCap

9 Bitcoin Cash (BCH) Trend BCH saw a decline of 29% from August 1st to August 31st. Bitcoin Cash extended its decline below the $650 and $600 support levels against the US Dollar. Looking at the daily chart, the price even cleared the $500 pivot level and the 21-day simple moving average. A new monthly low was formed at $474. The price is currently consolidating around the $500 level. As on 31st Aug 18, BCH was trading at $ However, the most important resistance for Bitcoin Cash buyers is near the $ zone. Supports are visible at $500 and $475, below which the price is likely to tumble towards the $400 level. On 30th Aug 18, BCH s trading volume was 337 million with an average transaction cost of $ Source: CoinMarketCap

10 Top Ten Cryptocurrencies (1 st August 31 st August) Week s price ($) (31 st August) Week s price ($) (1 st August) % change Market Cap ($mn) (31 st August) Market Cap ($mn) (1 st August) % change Bitcoin (BTC) 7, , % 120, , % Ethereum (ETH) % 28,882 43, % Ripple (XRP) % 13,301 17, % Bitcoin Cash (BCH) % 9,329 13, % EOS (EOS) % 5,492 6, % Stellar (XLM) % 4,164 5, % Litecoin (LTC) % 3,509 4, % Tether (USDT) % 2,786 2, % Cardano (ADA) % 2,616 3, % IOTA (MIOTA) % 1,985 2, % Source: CoinMarketCap The market cap of cryptocurrencies is a product of the volume of the currency and its price. The top 10 cryptocurrencies comprise almost 83% of the total market cap of cryptomarket at the time of writing. Over the month, the market cap of top 10 cryptos decreased from $233 billion on 1st August to $192 billion on 31st August, a decrease of almost 18%. *In the month of August, *IOTA (MIOTA) replaced Monero and entered top 10 crypto table with a market cap of $2,031 million as on 2nd Sep 18. It jumped to 10th spot pushing down the Monero (XMR) to 11th spot whose market cap was $2,019 million as on 2nd Sep 18. However, Monero regained its position at the time of writing with a market cap of $1,862 million which is higher than IOTA whose market cap stands at $1,644 million at the time of writing. *Stellar (XLM) has replaced Litecoin and moved one place above in the ranking table last month and strongly holds that position. It jumped to 6th spot pushing down the Litecoin (LTC) to 7th spot. It is holding the 6th spot for over a month now. *Tether (USDT) has replaced Cardano and moved one place above in the ranking table and strongly holds that position. It jumped to 8th spot pushing down the Cardano(ADA) to 9th spot.

11 Conclusion Looking at the monthly charts, the leading cryptocurrency markets experienced heavy selling during August with the top five crypto markets falling by between 8% and 35% from the start of the month when measuring against USD. Bitcoin s price mostly struggled in August 2018 and declined towards $6,000. Later, BTC/USD formed support and recovered above $6,500. Similarly, altcoins like ETH, XRP, BCH, EOS, XLM, TRON, ADA, LTC and DASH declined heavily before correcting slightly. The market sentiment is improving, but Bitcoin and altcoins are facing many resistances on the upside. Overall, the cryptocurrency market capitalization decreased during August from $233 billion to $192 billion, a total loss of 17.7%. The Bitcoin capitalization fluctuated from $103.2 billion to $133.5 billion. During August, the price change of the leading cryptocurrencies by capitalization compared to the start of the month ranged from -4.9% (Monero) to -29.0% (Bitcoin Cash). is still a maturing marketplace, and we can expect to witness a lot of changes and innovations in the coming months and years. With every new low, there are number of assumed reasons but always short of a definite reason. So much is happening on a daily basis that it becomes difficult to predict which way market will move. It would appear as though the entire cryptocurrency space is reacting to some piece of news. From the start of August to mid-august, there was a general downward trend toward in capitalization, caused in large part by the actions of the SEC when considering applications on Bitcoin ETFs. In particular, the plunge on August 7-8 was due to the SEC postponing the decision on the VanEck and SolidX Bitcoin ETFs, whereupon the Bitcoin price dropped to $6,500. After August 17, Tether s capitalization increased by $280 million over the course of one hour, from $2.4 billion to $2.68 billion. On August 23, The US Securities and Exchange Commission rejected nine applications to issue Bitcoin ETFs all at once, two of which were submitted jointly by ProShares and the NYSE Arca exchange. The Chinese messenger WeChat blocked accounts with news on blockchain and cryptocurrencies; and access to foreign cryptoexchanges was blocked in China. Bitcoin dominance on the market increased during August from 48% to 53%, which indicates the high sensitivity of altcoins to negative news. A sharp decline in the entire market was seen from August 7-14, especially among altcoins. For example, in the space of a week the Ethereum price fell from $410 to $250. However, a positive trend has been observed since August 24, with the market slowly starting to gain traction. The real turning point was when the SEC announced the possible reconsideration of its decision on Bitcoin ETFs (Coinspeaker). The movement of the Monero price can be noted separately. This is the only cryptocurrency from the top 10 by capitalization whose price fell by less than Bitcoin. The price of this cryptocurrency remained practically the same during August. The overall trend for the month has been negative. The dominance of the cryptocurrency market leader, Bitcoin, continues to gain momentum, with it getting harder and harder for altcoins to survive in the bear market. This is due to the higher sensitivity of most altcoins to overall trends, as a result of their high elasticity and volatility. The infrastructure is ready for higher workloads and for the use of new trade mechanisms. However, for now only the outflow of funds is being seen. Perhaps the decision on Bitcoin ETFs will trigger new growth. Exchange-traded funds (ETFs) could quickly ensure a new influx of funds to this segment by major backers and a growth in capitalization over the medium term. This being said, it would be interesting to see how the crypto market dynamics will shift from here onward.

12 Disclaimer: This publication is provided by Invsta in good faith for general information purposes only. Information has been prepared from sources believed to be reliable and accurate at the time of publication, but this is not guaranteed. Information, analysis or views contained herein reflect a judgement at the date of publication and are subject to change without notice. This is not intended to constitute advice to any person. This does not constitute advice of a legal, accounting, tax or other nature to any persons. You should consult your tax adviser in order to understand the impact of investment decisions on your tax position. Past performance is not indicative of future results, and no representation or warranty, express or implied, is made regarding future performance. Cryptocurrencies are a highly volatile, high risk investment in which the value can change significantly. Before making any investment you should consider your own risk tolerance level and personal financial situation.