Digital Assets Industry Report August 2018

Transcription

1 Digital Assets Industry Report August 2018

2 Introduction The Digital Asset Industry Report is a monthly report that summarises 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, specialised 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, transparent and rules-based investment product 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 48

4 Monthly Performance Review

5 Industry News European Parliament advises regulators to treat crypto as standard financial instrument The report states that "Policy makers and regulators should not ignore virtual currencies, and should not try to ban them. Both extreme approaches are incorrect." Given the increasing interest from investors in crypto assets, addressing regulation will be imperative. G20 finance ministers 2018 agenda included regulation of cryptos Among the topics discussed at the summit, cryptocurrencies took part of the spotlight as ministers debated how to appropriately deal with the emergence of the peer-to-peer economy. Securities and Exchange Commission (SEC) delays verdict on Bitcoin ETF until Sep 30 VanEck applied for a physically backed Bitcoin ETF, the first of its kind. The goal is to provide investors with a higher level of security. All other Bitcoin ETF applicants so far proposed using Bitcoin futures. First session of Ripple's trial for alleged price manipulation took place on Aug 08 Ripple is in court again after the third lawsuit brought against them alleges that they own the majority of XRP tokens which gives them sufficient power to influence the price of XRP. 5

6 Billions Market Capitalisation Global Market Capitalisation of Crypto Assets Rank Token - Aug Nov Feb May Aug Source: Directly from respective Blockchain. Period shown from to Market cap as of % of total market cap 1 BTC 120,236,411, % 2 ETH 28,882,613, % 3 XRP 13,301,609, % 4 BCH 9,329,874, % 5 EOS 5,492,194, % 6 XLM 4,164,002, % 7 LTC 3,509,223, % 8 UST 2,786,346, % 9 ADA 2,616,087, % 10 IOT 1,985,346, % 11 XMR 1,688,839, % 12 TRX 1,636,705, % 13 DSH 1,520,923, % 14 ETC 1,346,385, % 15 NEO 1,271,313, % CTF15 199,767,878, % Total market 225,993,480,487 6

7 Returns - Monthly Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 1 year BTC -10% 50% 64% 45% -32% 6% -34% 31% -21% -16% 29% -14% 51% ETH -22% 3% 45% 68% 46% -20% -55% 74% -17% -22% 2% -38% -26% XRP -20% 4% 25% 630% -37% -18% -45% 67% -30% -24% -5% -24% 38% BCH -24% 1% 215% 93% -46% -16% -41% 95% -30% -26% 10% -34% -8% EOS -35% -10% 285% 239% 22% -25% -31% 254% -43% -35% -3% -19% 389% XLM -37% 130% 128% 288% 87% -31% -46% 136% -37% -34% 53% -25% 921% LTC -21% 5% 59% 183% -35% 33% -46% 28% -23% -32% 2% -26% -10% ADA 11% 277% 333% 11% -38% -56% 144% -40% -40% 17% -34% 283% UST 0% -1% 2% 0% -2% 1% 0% 0% 0% 0% 0% 0% 0% IOT -32% -32% 226% 185% -40% -13% -44% 83% -17% -41% -1% -26% -18% TRX 3% -27% 1836% 27% -18% -1% 116% -34% -39% -5% -31% 769% ETC -19% -16% 154% 9% -7% 29% -59% 51% -31% 3% 7% -24% -19% XMR -29% -9% 105% 110% -27% 9% -41% 45% -39% -17% 1% -17% -19% NEO -11% -3% 14% 108% 109% -2% -63% 77% -44% -42% 5% -38% -41% DSH -10% -16% 164% 56% -41% -10% -47% 51% -38% -23% -1% -20% -50% CTF15 16% 10% 49% 147% 3% -4% -49% 60% -19% -24% 8% -31% 74% 7

8 Returns - August All top 15 crypto assets corrected in August, posting negative returns. But most tokens managed to recover from their intra month lows and finished the month with a slightly positive trajectory /Jul/ /Aug/ /Aug/ /Aug/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. 500% 400% 300% 200% 100% 0% 04/Sep/ /Mar/ /Aug/2018 BTC ETH XRP BCH EOS XLM LTC UST IOT ETC XMR NEO DSH CTF15 Source: Directly from respective Blockchain. Minimum of 1y historical price data required. ADA and 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 August we can see IOT jumping higher. This was due to positive news regarding a cooperation with Toyota which lead to a price jump of 40%+ over the weekend. 800% 600% 400% 200% 0% 04/Sep/ /Mar/ /Aug/2018 BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH CTF15 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% 04/Sep/ /Mar/ /Aug/2018 BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH CTF15 0% 04/Sep/ /Mar/ /Aug/2018 BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH CTF15 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: and TRX:

13 Correlations Top 15 to Traditional Asset Classes Correlations across equities, bonds and gold remain very low over the past year. The highest value is 0.18 for ETH/Dev Market Equities and the lowest value is for ETC/ Equities: majority slightly positive between 0.18 and Bonds: majority slightly negative between 0.03 and : correlations are all slightly positive between 0 and Year Correlations* BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH CTF15 Dev. Markets Equities EM Equities Global Gov. Bonds *Correlation based on daily returns from except for ADA: and TRX:

14 1 Year Rolling Correlations The CTF15 strategy has maintained low and stable correlations to equities over the past year, swinging mostly between 0.05 and Interestingly, correlations to bonds have trended downwards and become negative since March. CTF15 1y rolling correlations /Sep/ /Mar/ /Aug/

15 Billions Trading Volume Top 15 Average trading volumes remained stable in August, despite August traditionally being a slow month in term of activity due to the holiday season in Europe and the US. In Dec 17 and Jan 18 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 every month since, more than twice the pre- Dec 17 levels Average Daily Trading Volume Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Source: Coin Metrics BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH 15

16 Trading Volume Top 15 One clear trend is the increasing market share of Tether (UST). Despite continuing debate about its business model, Tether has established itself as a bridge between fiat currency and crypto assets. E.g. if a particular crypto asset were to have low liquidity against the EUR, an investor could exchange his EUR into UST and then trade UST against the desired crypto asset. Liquidity in UST is often higher than liquidity of any single fiat currency against crypto assets. % Share of Average Daily Trading Volume 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Source: Coin Metrics BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH 16

17 Top 15 Digital Assets

18 Thousands Billions 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 capitalisation of all crypto assets Market cap: USD 120.3bn Circulating supply: 17.2mn Maximum supply: 21mn Emission rate: decreasing over time, based on algorithm Transactions per second: ~7 Block processing time: ~10min BTC Transactions BTC on Exchange Trading Volume (USD) Source: Company webpage, CoinCheckup, BitInfoCharts

19 Thousands Millions 2. Ethereum (ETH) Blockchain based technology platform for the development of 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 28.9bn Circulating supply: 101.7mn Maximum supply: uncapped Emission rate: based on network activity Transactions per second: ~15 Block processing time: ~15sec ETH Transactions 0 ETH on Exchange Trading Volume (USD) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 19

20 Thousands Millions 3. Ripple (XRP) Fast & cheap cross-border payment solution targeted at 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: 39.7bn Maximum supply: 100bn Emission rate: based on network activity Transactions per second: ~1500 Block processing time: ~4sec XRP Transactions XRP on Exchange Trading Volume (USD) Source: Company webpage, CoinCheckup, BitInfoCharts 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000-20

21 Thousands 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 9.3bn Circulating supply: 17.3mn Maximum supply: 21mn Emission rate: decreasing over time, based on algorithm Transactions per second: ~ Block processing time: ~10min 140 BCH Transaction 12,000 BCH on Exchange Trading Volume (USD) ,000 8,000 6,000 4,000 2,000 0 Source: Company webpage, CoinCheckup, BitInfoCharts - 21

22 Thousands 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 USD 4bn ICO, largest in history Industrial scale decentralised applications High potential transaction volume Smart contracts EOS Transactions 0 Market cap: USD 5.5bn Circulating supply: 906.2mn Maximum supply: 1000mn Emission rate: based on network activity Transactions per second: ~1-5k Block processing time: ~30sec - Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 6,000 5,000 4,000 3,000 2,000 1,000 EOS on Exchange Trading Volume (USD) 22

23 Thousands 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 decentralised + 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 XLM Transactions XLM on Exchange Trading Volume (USD) Source: Company webpage, CoinCheckup, BitInfoCharts 1,600 1,400 1,200 1,

24 Thousands 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 3.5bn Circulating supply: 58.1mn Maximum supply: 80mn Emission rate: based on network activity Transactions per second: ~28 Block processing time: ~2:30min LTC Transactions LTC on Exchange Trading Volume (USD) Source: Company webpage, CoinCheckup, BitInfoCharts 7,000 6,000 5,000 4,000 3,000 2,000 1,000-24

25 Thousands 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 and cryptos Market cap: USD 2.8bn 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. UST Transactions Source: Company webpage, CoinCheckup, BitInfoCharts UST on Exchange Trading Volume (USD) 7,000 6,000 5,000 4,000 3,000 2,000 1,000-25

26 Thousands 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 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 ADA Transactions ADA on Exchange Trading Volume (USD) /30/ /31/2017 3/31/2018 6/30/2018 1,800 1,600 1,400 1,200 1, /25/ /25/2017 3/25/2018 6/25/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 26

27 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 IOT Exchange Volume (USD) 2,000 1,500 1, Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 27

28 Thousands Millions 11. Monero (XMR) Largest privacy coin, offers a digital payment system that provides complete privacy 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 1.7bn Circulating supply: 16.4mn Maximum supply: uncapped Emission rate: based on network activity Transactions per second: ~30 Block processing time: ~2min XMR Transactions XMR on Exchange Trading Volume (USD) Source: Company webpage, CoinCheckup, BitInfoCharts

29 Thousands 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 1.6bn Circulating supply: 65.7bn Maximum supply: 100bn Emission rate: at discretion of company Transactions per second: ~2000 Block processing time: ~15sec TRX Transactions /13/ /13/2017 3/13/2018 6/13/2018 Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, TRX on Exchange Trading Volume (USD) 29

30 Thousands 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 1.5bn Circulating supply: 8.3mn Maximum supply: 22mn Emission rate: based on network activity Transactions per second: ~56 Block processing time: ~2:30min DASH Transactions DASH on Exchange Trading Volume (USD) Source: Company webpage, CoinCheckup, BitInfoCharts

31 Thousands Millions 14. Ethereum Classic (ETC) Blockchain based technology platform for the development of 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: 104.3mn Maximum supply: 210mn Emission rate: deflation through token burning Transactions per second: ~4 Block processing time: ~15sec ETC Transactions 0 ETC on Exchange Trading Volume (USD) 2,000 1,800 1,600 1,400 1,200 1, Source: Company webpage, CoinCheckup, BitInfoCharts; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 31

32 Thousands 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 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 NEO Transactions NEO on Exchange Trading Volume (USD) ,800 1,600 1,400 1,200 1, Source: Company webpage, CoinCheckup, BitInfoCharts ; *DAPs = Decentralised Applications; **DAOs = Decentralised Organisations 32

33 Appendix

34 Returns 1 y Cumulative All of the top 15 tokens peaked in Dec 17/Jan 18. Half of them have since corrected and gave up their gains, ending the one year period negative. However the other half managed to sustain some of their profits and ended the period significantly positive /Aug/ /Mar/ /Aug/2018 BTC ETH XRP BCH EOS XLM LTC ADA UST IOT TRX ETC XMR NEO DSH CTF15 Source: Directly from respective Blockchain. Period shown from to

35 30 Days Rolling Upside & Downside Volatilities 250% CTF15 200% 150% 100% 50% 0% CTF15 Downside CTF15 Upside 35

36 30 Days Rolling Upside & Downside Volatilities Bitcoin Ethereum 200% 200% 150% 150% 100% 100% 50% 50% 0% 0% BTC Downside BTC Upside ETH Downside ETH Upside Ripple Bitcoin 500% 4 400% % % % % XRP Downside XRP Upside 0 BCH Downside BCH Upside 36

37 30 Days Rolling Upside & Downside Volatilities EOS Stellar 350% 600% 300% 500% 250% 200% 150% 400% 300% 100% 200% 50% 100% 0% 0% EOS Downside EOS Upside XLM Downside XLM Upside Litecoin Cardano 450% 9 400% 8 350% 7 300% 6 250% 5 200% 4 150% 3 100% 50% 0% LTC Downside LTC Upside ADA Downside ADA Upside 37

38 30 Days Rolling Upside & Downside Volatilities Tether 40% 35% 30% 25% 20% 15% 10% 5% 0% IOTA 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% UST Downside UST Upside IOT Downside IOT Upside Tron Ethereum % % % 100% 2 50% 0 TRX Dowjside TRX Upside 0% ETC Downside ETC Upside 38

39 30 Days Rolling Upside & Downside Volatilities Monero 350% 300% 250% 200% 150% 100% 50% 0% Neo 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% XMR Downside XMR Upside NEO Downside NEO Upside 300% Dash 250% 200% 150% 100% 50% 0% DSH Downside DSH Upside 39

40 1 Year Rolling Correlations Bitcoin 1y rolling correlations Ethereum 1y rolling correlations Ripple 1y rolling correlations Bitcoin Cash 1y rolling correlations /Aug/ /Aug/ /Aug/ /Aug/ /Aug/

41 1 Year Rolling Correlations EOS 1y rolling correlations Stellar 1y rolling correlations Litecoin 1y rolling correlations Tether 1y rolling correlations

42 1 Year Rolling Correlations IOTA 1y rolling correlations /Jun/ /Jun/ /Jul/ /Jul/ /Aug/ /Aug/2018 Ethereum Classic 1y rolling correlations Monero 1y rolling correlations Neo 1y rolling correlations /Oct/ /Jan/ /Apr/ /Jul/

43 1 Year Rolling Correlations 0.15 Dash 1y rolling correlations

44 30 Days Rolling Correlations 0.60 CTF

45 30 Days Rolling Correlations BTC 30d rolling correlations ETH 30d rolling correlations XRP 30d rolling correlations Bitcoin Cash 30d rolling correlations

46 30 Days Rolling Correlations EOS 30d rolling correlations Stellar 30d rolling correlations Litecoin 30d rolling correlations Cardano 30d rolling correlations

47 30 Days Rolling Correlations Tether 30d rolling correlations IOTA 30d rolling correlations Tron 30d rolling correlations Ethereum Classic 30d rolling correlations

48 30 Days Rolling Correlations Monero 30d rolling correlations Neo 30d rolling correlations Dash 30d rolling correlations

49 Get in touch for more information. Paul Claudius Chief Executive Officer Andre Voinea Executive Director

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