Monthly Market Performance Report

Transcription

1 Monthly Market Performance Report October 2018 Cryptocurrency Market Performance First week s overview (1 st October 18 7 th October 18) Cryptocurrency (As on 7 th Oct 18) Week s end price (7 th Oct) Week s start price (1 st Oct) % Change Bitcoin (BTC) 6, % Ethereum (ETH) % Ripple (XRP) % Bitcoin Cash (BCH) % After ending September with some impressive performances (XRP climbed by roughly 200% in the span of just a few days late in the month), many of the top digital currencies by market cap spent the first few days of the new month trading generally sideways. After a slight dip in the middle of the week, industry leader bitcoin recovered in the final days of the week and was trading just under $6,600. Ethereum, the second-largest token by market cap, declined slightly over the week but posted small gains to help recover those losses from Friday into Saturday. According to data from Coinmarketcap, each of the other cryptocurrencies in the top 10 by total market cap had seen a marginal dip in value heading into the weekend Second week s overview (8 th October th October 18) Cryptocurrency (As on 14 th Oct 18) Week s end price (14 th Oct) Week s start price (8 th Oct) % Change Bitcoin (BTC) 6, , % Ethereum (ETH) % Ripple (XRP) % Bitcoin Cash (BCH) % This week all the major cryptos ended the week in red. In the middle of the week, many of the top digital currencies in the world saw their values plunge dramatically. Among the most popular digital currencies, ethereum and ripple (XRP) led the dive, according to data by Coinmarketcap. Even in spite of having recovered

2 slightly from midweek lows, ethereum was hovering just marginally below $200 and XRP was below $0.42 per token as of this writing. Bitcoin also fell in the turbulent period in the middle of the week, although it stabilized before losing an equivalent percentage of its value. Nonetheless, with a price of $6,274 as of this writing, BTC has fallen below the mid-$6,000s price point it has experienced for several weeks. Third week s overview (15 th October st October 18) Cryptocurrency (As on 21 st Oct 18) Week s end price (21 st Oct) Week s start price (15 th Oct) % Change Bitcoin (BTC) 6, , % Ethereum (ETH) % Ripple (XRP) % Bitcoin Cash (BCH) % Last week all the major cryptos ended in red except ripple. The calmness prevailed over turmoil and there was no major movement in prices over the week. Going by numbers, BTC, ETH & BCH were down by 1.30%, 1.40%, 1.91% respectively. Ripple saw a minute increase of 3.00% over the week.. Fourth week s overview (22 nd October th October 18) Cryptocurrency (As on 28 th Oct 18) Week s end price (28 th Oct) Week s start price (22 nd Oct) % Change Bitcoin (BTC) 6, , % Ethereum (ETH) % Ripple (XRP) % Bitcoin Cash (BCH) % This week leading digital currencies like bitcoin and ether had continued to hover around average price points which remained relatively steady. Nearly all of the top 10 digital currencies by market cap have traded fairly horizontally overall throughout the week. Although some of the coins and tokens had seen marginal dips heading into the end of the week, bitcoin remains relatively close to its $6,500 threshold, while ether was tied to its $200 price point.

3 Monthly overview (1 st Oct st Oct 18) Cryptocurrency (As on 31 st Oct 18) Month s end price (31 st October) Month s start price (1 st October) % Change Bitcoin (BTC) $6, $6, % Ethereum (ETH) $ $ % Ripple (XRP) $0.448 $ % Bitcoin Cash (BCH) $ $ % All 10 of our top 10 market cap coins dropped in value from the 1st of October to the 31st, which unfortunately has become a norm for the market, but the drops in value were not quite as dramatic as they have been in recent months. October witnessed a 9.4% decline in total market capitalization. This has resulted in the loss of over $20 billion from cryptocurrencies during the month. Bitcoin celebrated its 10th birthday this month, which has caused many people involved in the cryptocurrency market to look back at the coin s highs and lows over the years. The cryptocurrency news was equal parts exciting and worrying this month, from a newly developed HTC cell phone that can only be purchased with cryptocurrency to a free fall in some of the market s top coins. 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 the 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 It s never a good sign when the values of some major cryptocurrencies plummet with little to no warning. Not only is it bad news for those that have money tied up in those coins, but it also doesn t help the cryptocurrency market s reputation for dangerous volatility. On October 9th, the price of Bitcoin, Ripple, and Ethereum tanked. Bitcoin fell by 5%, and Ripple and Ethereum by 10%. Within just three hours of this random plummet, almost $13 billion in value of coins had vanished from the cryptocurrency market. We ve seen occurrences in the past when Bitcoin s temperamental value has also dragged down the value of some other coins. This may be because we orient the value of the market s altcoins based on Bitcoin s value. Just before the drop occurred, the International Monetary Fund put out a report that said, Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system. And while we can t tie this event to the drop with 100% certainty, it s safe to say it was probably a contributing factor.

4 This could be a reason probably for the negative movement in the market. The presence of institutional investors is paramount to bring stability in the market and such a news can easily bring turmoil in the market especially when market is news sensitive. 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 current market movement. Neither the downward nor upward trend could be attributed to one single reason. Investors need to keep a watch on market and place trades accordingly Developments over the month in Cryptomarket 1) On 4th Oct 18, two Chilean deputies have presented a resolution on blockchain adoption to the lower house of the country s parliament. The proposed blockchain resolution project was first registered in late August. In the project proposal, the two presenting members of parliament (MPs) Miguel Angel Calisto and Giorgio Jackson, along with eight other MPs, appeal to the Chilean president Sebastian Pinera, urging him to implement blockchain in all public areas of the country. 2) SEC sets October 26 deadline for reviewing nine Bitcoin ETF applications. The U.S. Securities and Exchange Commission (SEC) has outlined a time frame for reviewing proposed rule changes related to a series of applications to list and trade various Bitcoin (BTC) exchange-traded funds (ETFs). 3) One of Spain's busiest ports based in the city of Valencia has announced the creation of a "smart port" which will use blockchain and big data technologies. De La Guia, who is responsible for implementing new technologies in the Port Authority of Valencia said that blockchain would help create "ports without papers", to optimise the resources worldwide, to reduce time spent on maintenance, as well as to cut costs 4) Kenya s government plans to deploy blockchain technology to manage a government housing project of 500,000 units 5) Former chairman of the U.S. Commodity Futures Trading Commission (CFTC), Gary Gensler said that most tokens sold through Initial Coin Offerings (ICOs) should be classified as securities 6) Gary Cohn, a former chief economic adviser to U.S. Pres. Donald Trump has joined the board of advisers of blockchain-related tech company Spring Lab 7) The world s four largest agriculture companies, commonly known as ABCD (Archer Daniels Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co, have partnered to digitize international grain trading by using blockchain and artificial intelligence (AI) technologies 8) Alibaba Cloud, the cloud computing arm of China s e-commerce giant Alibaba Group, is enhancing its Blockchain-as-a-Service (BaaS) offering outside China 9) U.S. banking giant Goldman Sachs and its former partner Mike Novogratz, now CEO of crypto investment firm Galaxy Digital, have recently invested in U.S. crypto custody service BitGo 10) The Government of Gibraltar in collaboration with the University of Gibraltar have created an advisory group focused on the development of blockchain-related educational courses. 11) The government of Bermuda has awarded the first certification for an Initial Coin Offering (ICO) under the island nation s new regulatory regime for crypto and blockchain business

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7 Bitcoin (BTC) Trend In the month beginning, Bitcoin price was trading with a positive bias above $6,400 against the US Dollar. Bitcoin price found a strong buying interest above the $6,400 level against the US Dollar. The BTC/USD pair started an upside move and traded above the $6,480 resistance level. It opened the doors for more gains and the price spiked above the $6,600 level. However, BTC fell going forward and toward the end of the month, the BTC/USD pair remained well bid around the $6,380 level, which acted as a strong support. The recent low was formed at $6,385 before the price started an upside correction. Bitcoin price was holding the key $6,350 support against the US Dollar. At the end, market plunged a bit with the price of Bitcoin remaining at $6, at the end of the month (31st Oct 18) witnessing a fall of 4% over the month. On 31st Oct 18, BTC s trading volume was 4 billion with an average transaction cost of $0.42 Source: CoinMarketCap

8 Ripple (XRP) Trend This month Ripple price struggled to retain gains against the US Dollar and Bitcoin. The XRP/USD pair traded above the $ and $ levels. However, the upside move was capped by the $ and $ resistance levels. Towards the end of the first week, XRP fell below 0.50 mark Going forward, XRP saw a sharp downside move below the $ level in Ripple price against the US Dollar. The XRP/USD pair spiked towards $ before correcting higher. However, the correction was limited and the price declined further below $ and $ It traded close to the $ level and formed a low at $ Towards the end of the month, Ripple price started a downside correction after trading towards the $ level against the US dollar. XRP saw a solid upward move in ripple price above the $ level against the US Dollar. The XRP/USD pair traded above the $ and $ levels. It traded as high as $ and later started a downside correction. The price moved down and broke the $ and $ support levels On 31st Oct 18, XRP was trading at $0.45, witnessing a fall of 22% over the month. On 31st Oct 18, XRP s trading volume was 367 million with an average transaction cost of $ Source: CoinMarketCap

9 Ethereum (ETH) Trend In the beginning week (1st Oct - 7th Oct) there were mostly range moves above the $210 support in ETH price against the US Dollar. The ETH/USD pair traded higher above the $220 and $224 levels, but it failed to hold gains. During the upside move, there was a break above the $227 level and the 100 simple moving average (4-hours). However, the upside move was protected by the $ zone Going forward, there was a sharp downside move from the $234 resistance zone in ETH price against the US Dollar. The ETH/USD pair tumbled and broke the $206 and $200 support levels. It tested the $ support and formed a low at $ The price later started an upside correction above $190 Towards the end, there were mostly range moves below the $205 level in ETH price against the US Dollar. The ETH/USD pair traded a few points lower and broke the $200 level. It traded close to the $ support area, which acted as a strong buy zone. Later, the price recovered above $200, but gains were limited. The price of one Ethereum coin started October at $ and fell to $ which is a fall of 14% over the month. On 31st Oct 18, ETH s trading volume was 1.4 billion with an average transaction cost of $0.137 Source: CoinMarketCap

10 Bitcoin Cash (BCH) Trend In the first week of September, Bitcoin cash price was showing a few bearish signs below $530 against the US Dollar. The BCH/USD pair failed to break the $530 resistance and remained under pressure. Towards the end of the week, BCH was trading below $515 mark. Going forward, we saw a major downside move below the $520 and $500 supports in bitcoin cash price against the US Dollar. The BCH/USD pair declined heavily and broke the $450 support. There was also a close below the $450 level and the 100 simple moving average (4-hours). It traded close to the $ support area and formed a low at $421. Later, the price started an upside correction and moved above the $430 level. Towards the end of the month, there was a slow and steady decline from the $452 swing high in bitcoin cash price against the US Dollar. The BCH/USD pair made many attempts to recover above $450, but it failed. As a result, the price declined below the $440 support and the 100 simple moving average (4-hours). It traded as low as $431 In October, BCH saw a decline of 20% from October 1st to October 31st. On 31st Oct 18, BCH s trading volume was 286 million with an average transaction cost of $ Source: CoinMarketCap

11 Top Ten Cryptocurrencies (1 st October 31 st October) Cryptocurrency Week s price ($) (31 st October) Week s price ($) (1 st October) % change Market Cap ($mn) (31 st October) Market Cap ($mn) (1 st October) % change Bitcoin (BTC) 6, , % 109, , % Ethereum (ETH) % 20,314 23, % Ripple (XRP) % 18,027 23, % Bitcoin Cash (BCH) % 7,371 9, % EOS (EOS) % 4,709 5, % Stellar (XLM) % 4,226 4, % Litecoin (LTC) % 2,915 3, % Tether (USDT) % 1,755 2, % Cardano (ADA) % 1,807 2, % Monero(XMR)* % 1,716 1, % 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 85% of the total market cap of cryptomarket at the time of writing. Over the month, the market cap of top 10 cryptos decreased from $190 billion on 1st October to $172 billion on 31st October, a decrease of almost 10%. *This month, Cardano with a market cap of 1,861 million has jumped one point above in the top 10 table and surpassed Tether to place itself at 8th position. At the time of writing, Stellar has pushed down EOS to sixth position to establish itself at 5th position

12 Conclusion For the eighth month this year cryptocurrency markets have fallen. October has been no exception with a 9.4% decline in total market capitalization. This has resulted in the loss of over $20 billion from cryptocurrencies during the month. At the end of October markets were at just over $200 billion, down 75% from their January high. The downtrend is still very clear but the losses have grown smaller indicating that the bottom could be close. Bitcoin lost ground in October, starting the month at just over $6,600 and ending it at $6,320. This 4.00% decline is not as bad as it seems since BTC has held above the $6k level for a year now, aside from a couple of quick bounces below it. It has come a long way in the past ten years and some stability is welcome. Tron is one of the crypto winners for October because TRX ended the month where it started at $0.222 making it the first altcoin in the chart not to have lost ground. Ethereum has lost 14% during October, starting out at $231 and ending at $197. It is ETH s lowest levels since July 2017 and no recovery looks to be coming just yet. Market capitalization is around the $20 billion mark with the world s second largest cryptocurrency having lost almost $4 billion last month. XRP has shown some promise in recent weeks but that could not stop the overall loss of 22% from Ripple s native token. XRP ended the month at $0.44 after starting October very close to $0.60. Bitcoin Cash has also been bashed during October with a 20% decline from $531 to $423. And EOS, rounding out the top five, has not escaped the bears either. A 10% slide saw EOS fall from $5.78 to $5.20 during the month. The usually stable Stellar also ended October in pain falling 15% from $0.26 to $0.22. Litecoin fared even worse with an 18% slump from $61 to just below $50 at the end of the month. Cardano has not made a gain this year and is one of the worse performing high cap altcoins. Last month was no exception as ADA shed another 20% falling from $0.085 to $ Things were that bad in October that even Tether made a loss, falling below its dollar peg to a low of $ Rounding out the top ten is Monero falling from $116 to $104 resulting in a loss of 10%. The industry has slowly been on pace to stabilize over the course of the year, and a confluence of factors are finally having a calming effect on prices and the industry in general. Groups have been formed to regulate the market. The Winklevoss twins self-regulatory Virtual Commodities Association denotes the collaboration of several important crypto exchanges and marks a sign of greater internal oversight that could draw in prospective investors. More importantly, governments have also begun providing clearer guidelines on the industry, helping assuage investors fears. According to David Wills, COO of Caspian, an institutional grade crypto trading platform, the matter of regulation is vital as investors need clarity and consistency, and regulators worldwide have thankfully been gradually providing this. In addition to regulation, investors have simply had their hands tied due to logistical matters within the industry. The matter of custody how to safely store large amounts of money, or in this case cryptocurrencies has been problematic for the industry. Most large banks and financial services institutions have been unwilling or unable to help. However, as more companies strive to provide a reliable custody

13 solutions for institutional funds, these very investors are gradually exhibiting greater willingness to expand their allocations Institutional money will likely be a stabilizing force for cryptocurrencies. While this influx of cash and attention is unlikely to completely drive the volatility out of the market a good thing considering it provides excellent opportunities for smart institutional funds it will help temper the sector s chaotic nature. Having said that, cryptos have always been volatile and caution is required before investing huge chunks of money.

14 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.