Q1 MARKET RESEARCH REPORT 218 Report is prepared by Cryptology Labs: Konstantin Zherebtcov. Head of Cryptology Labs Daria Patanina. Analyst at Cryptology Labs cryptology.com
Contents Total Market Capitalization 2 Percentage of Total Market Capitalization 3 Number of Unique Transactions per Day 4 Changes in the Profitability of Mining 5 Changes in the Difficulty of Mining 6 Blockchain usage in ICO projects 7 Total Market Capitalization Q1-218 $8B Market Cap $6B $4B $2B 24h Vol Jan '18 Feb '18 Mar '18 Apr '18 Market Cap 24h Vol coinmarketcap.com Within the first quarter of 218 the cryptocurrency market capitalization (market cap) dropped by more than half (54.7%). In March the market followed the negative trend. Thus, by the end of the first quarter of 218 the market cap has dropped to $26 billion, that is, to the price level of November 217. cryptology.com 2
Percentage of Total Market Capitalization Q1-218 5% 4% Percentage of Total Market Cap 3% 2% 1% % Jan '18 Feb '18 Mar '18 Apr '18 Bitcoin Ethereum Bitcoin Cash Litecoin Ripple Dash NEM Monero IOTA NEO Others coinmarketcap.com The share of Bitcoin increased from 38.6% to 45% within the first quarter. Whereas its rate decreased 5% within the first quarter, that is a bit less, than the reduction of the total market cap. This is due to a lower volatility of Bitcoin as compared to altcoins, and also due to a significant reduction of fees. As per other coins, they were in stable negative trend, caused by a protracted correction (after an incredible increase in the end of 217) and negative news related with the tightened regulation of the crypto market in a number of countries, and a great number of hack attacks and thefts. cryptology.com 3
Number of Unique Transactions per Day Q1-218/3/31 1 8 Unique transactions per day 6 4 2 BTC ETH BCH ETC LTC XRP ZEC DASH bitinfocharts.com Despite the fact that the events of Q1 were mostly negative and in overall led to the decrease of crypto market cap, we see significant positive trends, that is, the cost of Bitcoin transactions significantly decreased. After the implementation of SegWit and Lightning, the possibilities of Bitcoin blockchain considerably increased. Changes in Transaction Fee 35 3 25 Transaction fee 2 15 1 5 1 8 15 22 29 1 5 12 19 26 1 5 12 19 26 January February March 218 Bitcoin Ethereum bitinfocharts.com Compare, in December 217 the cost of transaction was $55, in the begining of 218 it was $26, and by the end of Q 1 it has made up $1. In the second quarter the cost of transaction was fluctuating at the average level of $.6. The decrease of the price is mostly connected with the two factors mentioned above. cryptology.com 4
Changes in the Profitability of Mining Bitcoin 3,5 3 2,5 2 Mining Profitability 1,5 1,5 1 8 15 22 29 1 5 12 19 26 1 5 12 19 26 January February March 218 bitinfocharts.com Ethereum,25,2 Mining Profitability,15,1,5 1 8 15 22 29 1 5 12 19 26 1 5 12 19 26 January February March 218 bitinfocharts.com While crypto mining is experiencing a slowdown due to Bitcoin and other cryptocurrencies yielding lower mining profits, many users doubt the profitability of mining in overall. In general, miners are becoming less and less interested to do it. The situation worsens because users stop believing in the future rise in price of coins, and this is the main thing that can now attract miners - long-term prospects. cryptology.com 5
Changes in the Difficulty of Mining Bitcoin 4T 3T Complexity 2T 1T 1 8 15 22 29 1 5 12 19 26 1 5 12 19 26 January February March 218 bitinfocharts.com Ethereum 3,5P 3P 2,5P Complexity 2P 1,5P 1P 5T 1 8 15 22 29 1 5 12 19 26 1 5 12 19 26 January February March 218 bitinfocharts.com While the growth of the difficulty of Bitcoin mining continues steadily, Ethereum s mining has experienced a period of strong growth in January and February and has come to relative stability closer to March. In general, all instabilities in the mining of the Etherium network are related to their plan to change the POW to POS, which certainly disturbs all of their community and community of miners in the first place. cryptology.com 6
Blockchain usage in ICO projects 14 279 Ethereum Own 11 Other 8 5 NEO Waves suicide.ventures Ethereum undoubtedly remains the leader in this field, practically 7% of all ICO projects use Ethereum to set up their platforms. cryptology.com 7
Crypto Analysis Crypto Analysis Contents Total Number of ICOs and Funds Raised 8 Number of Successfully Ended ICOs 9 Geographical Distribution for ICO Projects 1 Line-Up of the Main News in the Crypto World 11 Total Number of ICOs and Funds Raised Monthly ICO Raise vs. Number of ICOs $6 B 8 ICO ($) Raise Amount $5 B $4 B $3 B $2 B $1 B 33 $568 M 15 43 $75 M 51 $948 M 5 $841 M 76 $146 M 73 $1741 M 62 $2352 M 63 $2128 M 69 $726 M 63 $161 M $5499 M 6 7 6 5 4 2 1 Number of ICOs $117 M Jul '17 Aug '17 Sep '17 Oct '17 Nov '17 Dec '17 Jan '18 Feb '18 Mar '18 Apr '18 May '18 Jun '18 Raise Amount ($M) Count of ICOs coindesk.com A surprising, but easy-to-explain phenomenon is the growth in the number of ICO, despite all the deplorable state of the market. An even more interesting phenomenon is that in the first quarter of 218 118% of funds were already attracted, compared to the whole of 217. The new market is rapidly attracting new ideas and new people, despite the tragic completion of the fall in the prices of coins and the Total Market Capitalization in January. cryptology.com 8
Crypto Analysis Number of Successfully Ended ICOs ICO Analysis for Q1 218 252 ICOs 65% Failed 138 ICOs 35% Successful These indicators are more than expected. 217 attracted a large number of people who are not familiar with the investment market, wishing to make quick money. Therefore, many of them were disappointed, having lost money, investing in scam coindesk.com projects. Now, crypto investors are becoming wiser and more discriminating, which is easy to see in numbers. The second even more predictable trend is the transition of many projects from crowd sale to a private sale and work with private funds and investors. cryptology.com 9
Crypto Analysis Geographical Distribution for ICO Projects Q1 UK Canada $16,6 m 9 projects $99,7 m 26 projects Russia $2,8 m 13 projects Estonia USA $583,8 m 59 projects Cayman Islands $96,5 m 9 projects British Virgin Islands $158,5 m 5 projects Gibraltar $133,7 m 6 projects Netherlands $16,8 m 6 projects $122.6 m 16 projects Switzerland $268,2 m 14 projects China $22,1 m 9 projects Hong Kong $82,1 m 13 projects Singapore $468,1 m 34 projects Australia $3 m 6 projects icorating.com 218 began with key innovations: restrictions related to regulatory processes (SEC), restrictions on security-tokens. The prohibition of the ICO in countries such as China and South Korea. All this slightly shifted the registration of ICO projects to the crypto-friendly countries, but overall, did not change the whole picture. cryptology.com 1
Crypto Analysis Line-Up of the Main News in the Crypto World The first quarter of 218 was full of negative news, directly affecting the market. A list of all the main news is given below. 31.1.18 January 218 Facebook banned advertising related to the crypto industry 3.1.18 9.1.18 19.1.18 26.1.18 Market capitalization reaches $ 7 billion for the first time Banks of India block the accounts of Indian crypto-exchanges SEC showed its negative attitude to ETF-derivatives for Bitcoin Japanese crypto-exchange Coincheck reported the largest hacking and theft of $ 5 million February 218 26.2.18 2.2.18 13.2.18 6.2.18 The European Union recognized the importance of cryptocurrency for financial markets Coinbase and Bitfinex announced the integration of Segwit Dubai began issuing licenses to companies in the crypto industry (this is the first permit for trade in crypto-currencies in the Middle East) China has blocked access to all foreign crypto-exchanges. March 218 8.3.18 Nobuaki Kobayashi, the trustee of the bankrupt MT Gox, sold its assets worth $ 4 million 19.3.18 On the eve of the G2, the head of the FSB said that cryptocurrencies do not pose risks to global financial stability cryptology.com 11
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