The report covers data on the crypto market movements during 2018. Special focus has been given to the analysis of changes taking place over May 7-13, 2018.

Information as of May 14, 2018

This report was created by:

This report presents data on the cryptocurrency market changes during 2018. Special emphasis has been placed on an analysis of the changes that have taken place in April-May 2018, including over the past week (May 7-13, 2018).

1. General cryptocurrency and digital assets market analysis (by week, month, quarter). Market trends.

    1.1 General cryptocurrency and digital assets market analysis (by week, month)

Table 1.1. Trends in capitalization of the cryptocurrency market and main cryptocurrencies from February 1, 2018, to May 13, 2018*

Parameter 1-Feb-18 1-Mar-18 MoM, % 1-Apr-18 MoM, % 1-May-18 DoD, % 6-May-18 DoD, % 13-May-18 DoD, %
1 Total market capitalization, USD billion 517.2 440.0 -14.9% 263.9 -40.0% 423.2 60.4% 467.2 10.4% 390.0 -16.5%
2 Altcoin market capitalization, USD billion 344.8 264.6 -23.3% 145.2 -45.1% 265.8 83.1% 299.7 12.8% 245.0 -18.3%
Altcoin dominance, % 66.7% 60.1% 55.0% 62.8% 64.1% 62.8%
3 Bitcoin price, $ 10 237.3 10 385.0 1.4% 7 003.1 -32.6% 9 251.5 32.1% 9 845.3 6.4% 8 515.5 -13.5%
Bitcoin market capitalization, USD billion 172.4 175.4 1.8% 118.7 -32.3% 157.4 32.6% 167.5 6.5% 145.0 -13.4%
Bitcoin dominance, % 33.3% 39.9% 45.0% 37.2% 35.9% 37.2%
4 Ethereum price, $ 1 119.4 856.0 -23.5% 397.3 -53.6% 670.5 68.8% 816.1 21.7% 687.2 -15.8%
Ethereum market capitalization, USD billion 109.0 83.8 -23.1% 39.1 -53.3% 66.5 69.8% 81.0 21.8% 68.3 -15.7%
Ethereum dominance, % 21.1% 19.0% 14.8% 15.7% 17.3% 17.5%
5 Bitcoin Cash price, $ 1 491.1 1 204.8 -19.2% 688.0 -42.9% 1 348.6 96.0% 1 758.8 30.4% 1 474.8 -16.2%
Bitcoin Cash market capitalization, USD billion 25.3 20.5 -19.0% 11.7 -42.7% 23.1 96.6% 30.1 30.5% 25.3 -16.1%
Bitcoin Cash dominance, % 4.9% 4.7% 4.4% 5.5% 6.4% 6.5%
6 Litecoin price, $ 163.7 203.1 24.1% 116.9 -42.4% 148.3 26.9% 178.0 20.0% 141.8 -20.3%
Litecoin market capitalization, USD billion 9.0 11.3 25.0% 6.5 -42.0% 8.4 27.9% 10.0 20.2% 8.0 -20.2%
Litecoin dominance, % 1.7% 2.6% 2.5% 2.0% 2.1% 2.1%
7 Volume (24h) 4 crypto, USD billion 17.3 10.1 -41.4% 6.4 -36.9% 11.8 84.2% 12.9 9.5% 9.7 -25.0%
Market cap 4 crypto, USD billion 351.6 315.1 -10.4% 189.7 -39.8% 279.7 47.5% 314.1 12.3% 265.9 -15.3%
ZAK-4 Crypto index** 4.9% 3.2% 3.4% 4.2% 4.1% 3.6%
4 crypto dominance, % 68.0% 71.6% 71.9% 66.1% 67.2% 68.2%
8 Volume (24h) 8 crypto, USD billion 19.0 11.3 -40.3% 7.2 -36.3% 16.0 121.3% 15.2 -5.1% 11.9 -21.5%
Market cap 8 crypto, USD billion 393.4 349.3 -11.2% 208.7 -40.2% 319.5 53.1% 356.4 11.6% 299.8 -15.9%
ZAK-8 Crypto index*** 4.8% 3.2% 3.5% 5.0% 4.3% 4.0%
8 crypto dominance, % 76.1% 79.4% 79.1% 75.5% 76.3% 76.9%

* Data as of May 13, 2018 (all figures calculated at 03:00 UTC)
** Since December 1, 2017, the ZAK-4 index has been calculated using the cryptocurrencies Bitcoin, Ethereum, Ripple, and Bitcoin Cash.
*** When calculating the ZAK-8 index, the cryptocurrencies with the largest capitalization are used. At present (May 13, 2018), the cryptocurrencies Bitcoin, Ethereum, Ripple, Bitcoin Cash, Cardano, Litecoin, Stellar, and EOS are used to calculate the ZAK-8 index.
Data source: coinmarketcap.com

Over the past week (May 7-13, 2018) cryptocurrency market capitalization decreased, and as of 03:00 UTC on May 13 equaled $390 billion (see Table 1.1, Fig. 1). The drop in capitalization during the week took place mainly due to a fall in altcoin prices (by $55 billion), as well as due to a depreciation in the bitcoin price (by $22 billion).

The dominance of the four and eight largest cryptocurrencies as of 03:00 UTC on May 13, 2018, equaled 68.2% and 76.9%, respectively, with bitcoin dominance increasing to 37.2% (see Table 1.1). Despite the overall reduction in cryptocurrency market capitalization, considerable growth was seen last week in the prices of certain cryptocurrencies from the third (top 500) echelon by capitalization, such as Hydrogen (+209.05%), Primas (+135.19%), Hexx (+126.26%), Storiqa (+66.60%), and others.

The most significant changes took place on May 10-12, 2018, when capitalization fell from $440 billion to $367 billion (Fig. 1), i.e. by $73 billion. Part of the reason for the reduction in capitalization might have been the news concerning the withdrawal of 8,200 bitcoins from the wallets of Mt. Gox.

Figure 1. Cryptocurrency market capitalization since April 16, 2018

weekly-cryptocurrency-analysis-may-7-13-2018-figure-1

Data source: coinmarketcap.com

The rise and fall of cryptocurrency prices over the past week (May 7-13, 2018)

During the period from May 7-13, 2018, the change in the prices of cryptocurrencies in the top 500 ranged from -57.12% (Paypex) to +209.05% (Hydrogen).

Hydrogen is a project that plans to use public blockchain to revolutionize the financial sector.

The price of 58 cryptocurrencies and digital assets from the top 500 showed growth. Twelve cryptocurrencies in the list of the top 100 cryptocurrencies showed growth.

This past week the number of cryptocurrencies with a capitalization of more than $1 billion decreased from 30 to 24, with the price of nearly all of them falling except for Bytecoin (+27.38%), Zilliqa (+23.58%) and Tether (the price of which is tied to the US dollar). Qtum experienced the largest downward adjustment among the 24 largest cryptocurrencies (-28.08%).

The Bytecoin price increased by nearly a factor of 25 compared to BTC over the first five hours after its listing on the major exchange Binance on May 8, but then began to depreciate just as quickly. Ultimately, the growth over the week equaled around +27.38%, with due account of the average values of coinmarketcap.com.

The coins and tokens from the top 100 that demonstrated the largest price growth are given in Fig. 2.

Biggest gainers and losers during the week (May 7-13, 2018)

The prices of some cryptocurrencies may fluctuate from -50% to +50% over the course of a single day. Therefore, when analyzing cryptocurrency price trends, it is advisable to use their average daily amounts on various cryptoexchanges.

Below we consider the 10 cryptocurrencies that demonstrated the most significant change in price over the past week (Fig. 2-3). In this regard, only those coins and tokens included in the top 100 in terms of market capitalization (according to the data of coinmarketcap.com) were considered.

Figure 2. Largest growth in prices over the past week

weekly-cryptocurrency-analysis-may-7-13-2018-figure-2

Data source: coinmarketcap.com
The change in price was calculated based on average daily data

Tables 1.2 and 1.3 show the possible factors or events that might have influenced the fluctuation in prices for certain cryptocurrencies. Table 1.4 shows the possible factors or events that might have influenced the cryptocurrency market in general.

Table 1.2. Factors or events that might have led to a growth in cryptocurrency prices over the past week

Coins and tokens Symbol Price growth over the week, % Average price in $ on May 13, 2018 Market capitalization, USD billion Factors or events that might have led to a growth in cryptocurrency prices over the past week
1 Huobi Token HT 35.16% $3.57 0.18 The price of the Huobi Token increased significantly this week, although there was no special reason for it to do so. The growth may be connected with the team’s promise to buyback tokens to support the cryptocurrency’s price.

The price of Dentacoin may have appreciated on the back of rumors on its listing on the major cryptoexchange OKEx Twitter

The Bytecoin price grew by more than 150% on May 8, after its listing on the major exchange Binance Twitter

The Zilliqa price also increased due to news on its listing on a different major cryptoexchange, OKEx Twitter
The fluctuation in the Skycoin price from sharp growth to equally sharp decline can be explained by volatility.

Augur gave an optimistic update on the development work in progress, and may have shown positive growth this week against this backdrop Twitter

The Nuls price was supported by positive news on it being awarded a prize at the Chinese blockchain summit Twitter

The price movement of the other cryptocurrencies can be attributed to volatility.

Polymath is a digital token for a platform that intends to create a single site for trading in securities transferred to blockchain.

The 0x (ZRX) cryptocurrency is an open-source protocol created based on Ethereum smart contracts. Thanks to 0x, developers will be able to develop their own decentralized exchanges (DEX)

Tether is an ordinary digital asset, with the one distinguishing feature that it uses the digital equivalent of fiat currencies (tied to the US dollar)

 

2 Dentacoin DCN 30.55% $0.000971 0.32
3 Bytecoin BCN 27.38% $0.009179 1.69
4 Zilliqa ZIL 23.58% $0.176249 1.28
5 Skycoin SKY 22.90% $24.15 0.21
6 Augur REP 21.08% $52.29 0.58
7 Nuls NULS 12.30% $4.26 0.17
8 Polymath POLY 6.46% $0.945653 0.23
9 0x ZRX 6.04% $1.62 0.86
10 Tether USDT 0.44% $1.00 2.21

 

A depreciation in price was seen for 442 coins and tokens from the top 500 cryptocurrencies and digital assets by capitalization last week. The ten cryptocurrencies from the top 100 that experienced the most noticeable drops in price are shown in Fig. 3 and Table 1.3.

Figure 3. Largest fall in prices over the past week

weekly-cryptocurrency-analysis-may-7-13-2018-figure-3

Table 1.3. Factors or events that might have led to a fall in cryptocurrency prices over the past week

Coins and tokens Symbol Fall in price over the week, % Average price in $ on May 13, 2018 Market capitalization, USD billion Factors or events that might have led to a fall in cryptocurrency prices over the past week
1 Holo HOT -31.24% $0.001248 0.17 Most cryptocurrencies and tokens fell in price this week without any special visible reasons for doing so, simply following the overall market trend.

Holo is the digital token of the Holochain, which makes it possible to store and distribute data.

The Storm platform is a meeting place for clients and contractors. In other words, Storm is a freelance exchange.

Bitcoin Gold (BTG) is the most decentralized among the bitcoin cryptocurrencies.

Loopring is the digital token of a site for trading in tools produced on the Ethereum platform and other tools using the ERC20 protocol.

Qtum has created a flexible and easy to use system. The main advantages of the Qtum blockchain is the utilization of master contracts that can be used both “off-chain” and “on-chain”.

Bitcoin Diamond is one of the many bitcoin hard forks, which took place on November 24, 2017, on the 495,866 block of the bitcoin network.

Nano (NANO) is a decentralized site that only provides users with monetary functions. This means that the developers were careful to create a narrowly focused and advanced system for performing transactions.

Cortex (CTXC) tokens are one of two means of payment on the platform. The second is the Endorphin token.

DigixDAO is a site for tokenization of real assets, which gives users the ability to use the tokens to buy gold.

Hcash is a decentralized cross-platform open-source cryptocurrency that ensures easy exchange of value and data between platforms.

 

2 Storm STORM -29.40% $0.042951 0.18
3 Bitcoin Gold BTG -28.93% $56.88 0.97
4 Loopring LRC -28.45% $0.631846 0.36
5 Qtum QTUM -28.08% $16.33 1.45
6 Bitcoin Diamond BCD -27.31% $3.97 0.61
7 Nano NANO -27.09% $6.28 0.84
8 Cortex CTXC -26.52% $1.38 0.21
9 DigixDAO DGD -26.40% $191.88 0.38
10 Hshare HSR -26.26% $9.32 0.40

Data source: coinmarketcap.com
The change in price was calculated based on average daily data

Overall, cryptocurrency market capitalization fell by more than $70 billion, or 16%, over the week. Table 1.4 shows events that took place from May 7-13, 2018, that had an impact on both the prices of the dominant cryptocurrencies and the market in general, with an indication of their nature and type of impact.

Table 1.4. Key events of the week having an influence on cryptocurrency prices, May 7-13, 2018

Factors and events

(link to source)

Date of news Description Nature of impact Type of impact
1. Japan’s FSA Sets New Crypto Regulatory Paradigm [source: Btcmanager] May 7, 2018 The Financial Services Agency has announced the preparation of more strict regulatory restrictions aimed at preventing large-scale attacks on cryptocurrency exchanges such as the hack of Coincheck in January. Market ⇓ Unfavorable
2. Launch of Bitcoin Futures Dragged Down Prices, Fed Paper Shows [source: CNBC] May 7, 2018 According to analysts of the San Francisco Federal Reserve, the rapid growth and subsequent fall in cryptocurrency prices “is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.” Market

BTC ⇓

Uncertain
3. South Korea Financial Supervisory Service Changes Its Stance on Cryptocurrency [source: Ambcrypto] May 8, 2018 The new head of the Financial Supervisory Service Yoon Suk-heun announced that he sees “some positive aspects” to cryptocurrencies. The official believes that the industry needs better regulation.

 

Market ⇑

 

Favorable
4. First Version of Ethereum’s Casper Update Has Been Released [source: Cointelegraph] May 9, 2018 Developers presented the planned update of the protocol, ensuring an economic consensus in the Ethereum network.

 

ETH ⇑

 

Favorable
5. 8,200 BTC Moved from Mt. Gox Wallet, Possible Sell-Off Affects Bitcoin Price [source: CCN] May 11, 2018 The head of the board of trustees of the bankrupt bitcoin exchange Mt. Gox Nobuaki Kobayashi has allegedly moved 8,200 bitcoins from its wallets.

The transaction in the amount of 8,214.97084 BTC equaled $70.6 million at the exchange rate at the time of the move.

BTC ⇓ Favorable

 To analyze trading activity on cryptocurrency exchanges, the ZAK-n Crypto index is calculated (see the Glossary). The values of the ZAK-4 Crypto and ZAK-8 Crypto indices are presented in Tables 1.1, 1.5.a, and 1.5.b. In early May the 24-hour trading volumes (Volume 24h) for the four dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple) equaled from $9.7 billion to $16.4 billion (Table 1.5.a). The value of the daily ZAK-4 Crypto fluctuated from 3.6% to 5.8% of capitalization. The highest trading volume was seen on May 3.

Table 1.5.a. Daily ZAK-4 Crypto index calculation (from May 1-13, 2018)

Crypto Bitcoin (BTC) Ethereum (ETH) Bitcoin Cash (BCH) Ripple (XRP) 4 Crypto
  Price Open Volume (24h) Market cap Price Open Volume (24h) Market cap Price Open Volume (24h) Market cap Price Open Volume (24h) Market cap Volume (24h) 4 crypto Market cap 4 crypto ZAK-4 Crypto index
Date $ USD billion USD billion $ USD billion USD billion $ USD billion USD billion $ USD billion USD billion USD billion USD billion %
May 13, 2018 8 515 5.9 145.0 687 2.4 68.3 1 475 0.9 25.3 0.70 0.5 27.4 9.7 265.9 3.6%
May 12, 2018 8 441 6.8 143.7 680 2.7 67.6 1 376 1.5 23.6 0.69 0.6 26.9 11.5 261.7 4.4%
May 11, 2018 9 053 8.5 154.1 727 3.3 72.2 1 527 1.5 26.2 0.76 1.0 29.6 14.3 282.2 5.1%
May 10, 2018 9 326 6.9 158.8 753 2.7 74.8 1 646 1.1 28.2 0.80 0.4 31.5 11.1 293.2 3.8%
May 9, 2018 9 224 7.2 157.0 753 2.9 74.8 1 608 1.3 27.5 0.81 0.6 31.9 12.0 291.2 4.1%
May 8, 2018 9 381 7.4 159.7 755 2.9 75.0 1 673 1.1 28.6 0.83 0.5 32.6 11.9 295.9 4.0%
May 7, 2018 9 646 7.4 164.2 793 4.3 78.8 1 767 1.4 30.2 0.87 0.6 34.1 13.7 307.3 4.5%
May 6, 2018 9 845 7.2 167.5 816 3.1 81.0 1 759 1.9 30.1 0.90 0.6 35.4 12.9 314.1 4.1%
May 5, 2018 9 700 7.7 165.1 785 3.0 77.9 1 517 1.7 26.0 0.90 0.7 35.1 13.0 304.0 4.3%
May 4, 2018 9 696 8.2 165.0 777 3.5 77.1 1 501 1.0 25.7 0.88 1.0 34.5 13.7 302.2 4.5%
May 3, 2018 9 234 10.2 157.1 687 4.2 68.1 1 460 1.3 25.0 0.86 0.7 33.6 16.4 283.8 5.8%
May 2, 2018 9 105 7.6 154.9 674 2.8 66.8 1 354 1.2 23.2 0.84 0.5 32.9 12.1 277.7 4.4%
May 1, 2018 9 251 7.7 157.4 670 2.7 66.5 1 349 0.8 23.1 0.84 0.6 32.8 11.8 279.7 4.2%

Data as of 03:00 UTC
Data source: coinmarketcap.com

The 24-hour trading volumes (Volume 24h) for the eight dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Stellar, EOS, and Cardano) equaled only $11.9 billion by the end of last week (Table 1.5.b), i.e. 4% of their market capitalization, i.e. trading volumes fell below the level at the start of the month. The ZAK-4 Crypto and ZAK-8 Crypto indices are considered in more detail in Tables 1.5.a and 1.5.b.

Table 1.5.b. Daily ZAK-8 Crypto index calculation (continuation of Table 1.5.а)

Crypto Stellar (XLM) Cardano (ADA) EOS (EOS) Litecoin (LTC) 8 Crypto
  Price Open Volume (24h) Market cap Price Open Volume (24h) Market cap Price Open Volume (24h) Market cap Price Open Volume (24h) Market cap Volume (24h) Market cap ZAK-8 Crypto index
Date $ USD billion USD billion $ USD billion USD billion $ USD billion USD billion $ USD billion USD billion USD billion USD billion %
May 13, 2018 0.36 0.07 6.7 0.272 0.18 7.0 14.2 1.59 12.1 142 0.38 8.0 11.9 299.8 4.0%
May 12, 2018 0.31 0.09 5.8 0.263 0.26 6.8 15.0 3.09 12.7 137 0.41 7.8 15.4 294.9 5.2%
May 11, 2018 0.35 0.08 6.6 0.297 0.35 7.7 17.5 2.92 14.8 149 0.53 8.4 18.2 319.7 5.7%
May 10, 2018 0.38 0.04 7.0 0.324 0.12 8.4 18.0 1.29 15.2 157 0.43 8.9 13.0 332.7 3.9%
May 9, 2018 0.39 0.05 7.2 0.328 0.18 8.5 18.1 1.20 15.3 160 0.45 9.0 13.9 331.1 4.2%
May 8, 2018 0.40 0.05 7.4 0.336 0.14 8.7 18.0 1.45 15.1 165 0.47 9.3 14.0 336.4 4.2%
May 7, 2018 0.41 0.05 7.7 0.350 0.17 9.1 17.7 2.00 14.8 172 0.57 9.7 16.5 348.6 4.7%
May 6, 2018 0.43 0.04 8.0 0.366 0.15 9.5 17.7 1.43 14.8 178 0.63 10.0 15.2 356.4 4.3%
May 5, 2018 0.43 0.04 8.0 0.361 0.14 9.4 17.1 1.61 14.3 168 0.74 9.5 15.6 345.1 4.5%
May 4, 2018 0.44 0.05 8.1 0.371 0.17 9.6 17.7 1.75 14.8 160 0.63 9.0 16.3 343.8 4.7%
May 3, 2018 0.44 0.08 8.2 0.372 0.30 9.6 19.3 2.27 16.0 152 0.62 8.6 19.7 326.2 6.0%
May 2, 2018 0.44 0.07 8.2 0.358 0.27 9.3 18.9 2.41 15.7 148 0.35 8.4 15.2 319.2 4.8%
May 1, 2018 0.43 0.15 7.9 0.343 0.37 8.9 17.7 3.33 14.6 148 0.34 8.4 16.0 319.5 5.0%

 

Table 1.6 gives a list of events, information on which appeared last week, which could impact both the prices of specific cryptocurrencies and the market in general.

Table 1.6. Events that could have an influence on cryptocurrency prices in the future

 

Factors and events

(link to source)

Date of news Description Nature of impact Type of impact
1. NYSE Owner ICE Has Been Working on Bitcoin Trading Platform [source: Coinspeaker] May 9, 2018 Intercontinental Exchange, the largest futures market operator, is developing an online platform for trading in cryptocurrencies. Market ⇑

 

Favorable
2. Crypto Market is Down as Korea’s Largest Crypto Exchange Upbit Raided by Authorities [source: Coinspeaker] May 11, 2018 According to media reports, the office of Upbit is being raided, and a team from the prosecutor’s office has seized hard drives and accounting books. The accusers assert that the company transferred money from user accounts to the accounts of Upbit management. Market ⇓

 

Unfavorable

 

    1.2 Market trends

The weekly cryptocurrency and digital asset market trends from December 31, 2017, to May 13, 2018, are presented as graphs (Fig. 1.1-1.5).

Table 1.7. Legends and descriptions of the graphs

Global Figures Figure** Description
Total cryptocurrency market capitalization, USD million Fig. 1.1 This figure shows cryptocurrency and digital asset market capitalization trends from December 31, 2017.
The rate of market change (as a % to the beginning of 2017) Fig. 1.1 This figure shows the % change in cryptocurrency and digital asset market capitalization compared to December 31, 2017.
Change in the market capitalization (in USD million compared to previous period) Fig. 1.2 This figure shows the weekly change in USD million (increase or decrease) in cryptocurrency and digital asset market capitalization from December 31, 2017.
The rate of market change (as a % compared to the previous period) Fig. 1.2 This figure shows the % of weekly change (increase or decrease) in cryptocurrency and digital asset market capitalization from December 31, 2017.
Number of cryptocurrencies and digital assets Fig. 1.3 This figure shows the trends in the increase of the number of cryptocurrencies and digital assets circulating on cryptocurrency exchanges. On January 1, 2017, their number was 617, and as of May 13, 2018, this number had already reached 1,548 (coins and tokens on which there is information on capitalization and/or turnover were considered).
Average market capitalization, USD million Fig. 1.3 This figure reflects the growth in the average cryptocurrency and digital asset market capitalization from December 31, 2017, i.e. the ratio between the market capitalization of all cryptocurrencies and digital assets and their number.
Forecast of total cryptocurrency market capitalization Fig. 1.4, 1.5 This figure shows the time trend (forecast) change in cryptocurrency and digital asset market capitalization.

* NB! Average daily data are given in the graphs below. For this reason, the figures in the graphs may differ from the data in Table 1.1, where all figures were calculated at 03:00 UTC.
These differences in the values may be significant during periods of high cryptocurrency market volatility.
Data source: coinmarketcap.com

Figure 1.1. Total cryptocurrency market capitalization*

weekly-cryptocurrency-analysis-may-7-13-2018-figure-1-1

* Average daily data (according to the data of coinmarketcap.com).

Figure 1.1 shows a graph of the weekly cryptocurrency market change from December 31, 2017, to May 13, 2018. Over this period, market capitalization dropped from $572.5 billion to $388.8 billion, i.e. by 32%. Last week (May 7-13, 2018) cryptocurrency market capitalization decreased from $460.8 billion to $388.8 billion (as of May 13, 2018, based on the average figures from coinmarketcap.com).

 Figure 1.2. Change in market capitalization

weekly-cryptocurrency-analysis-may-7-13-2018-figure-1-2

The market is susceptible to sudden and drastic fluctuations. During the first week of January, market capitalization increased by approximately $250 billion, or 44%. The largest weekly fall in the first quarter of 2018 equaled $136 billion, or 23%, during the period from January 28-February 4, 2018.

Nine of the thirteen weeks in the first quarter of 2018 were “in the red”, i.e. capitalization fell based on the results of each of these weeks. In the second quarter, the market grew over the first five weeks. Last week (May 6-13) the market decline equaled $72 billion, or 16% (with due account of average daily data, see Fig. 1.2).

Figure 1.3. Number of cryptocurrencies and digital assets

Data source: coinmarketcap.com (coins and tokens on which there is information on capitalization and/or turnover were considered)

Since December 31, 2017, the total number of cryptocurrencies and digital assets considered when calculating market capitalization has increased from 1,335 to 1,548. Over the past week their number decreased by 20, from 1,568 to 1,548, and average capitalization equaled $251.1 million. In total, over the past month 94 new coins and tokens have appeared on coinmarketcap.com. However, it should be noted that a number of other coins and tokens were also excluded from the list. From among the tokens that were added last week, Aston, Skrumble Network, PolicyPal Network, MyToken and Docademic demonstrated high trading volumes.

 Figures 1.4 and 1.5. Forecast of total cryptocurrency market capitalization

weekly-cryptocurrency-analysis-may-7-13-2018-figure-1-4

weekly-cryptocurrency-analysis-may-7-13-2018-figure-1-5

At the end of 2017, two exchanges (the Chicago Board Options Exchange (СВОЕ) and the Chicago commodities exchange CME) were the first to start trading in Bitcoin futures. According to the information of Finance Magnates, at the end of last week it became known that one of the largest global financial corporations, the Intercontinental Exchange (ICE), which is the parent company of the New York Stock Exchange (NYSE), is planning to develop a bitcoin trading platform for Bitcoin Derivatives. This event could have a material impact on both the price of the dominant cryptocurrency and on the cryptocurrency market as a whole.

Finance Magnates also published news, citing the New York Times, that Goldman Sachs “begin using its own money to trade with clients in a variety of contracts linked to the price of Bitcoin.” The bank will also start to seek the approval of the regulators for trading in Bitcoin.

An expansion of the scope of trading in bitcoin futures could have a significant effect on its price, both favorable and unfavorable. On the one hand, an increase in the number of traditional exchanges (not cryptoexchanges) and the trading volume in futures on them will open more opportunities for an infusion of capital by major financial institutions, and could have an effect on the legal status of Bitcoin and other cryptocurrencies in various countries.

These factors will encourage a growth in price. On the other hand, however, the introduction of bitcoin futures on major exchanges should be treated with care, as it gives plenty of room for market manipulation. If major traders begin to bet on a reduction in the Bitcoin price and open contracts for billions of dollars, this could lead to increased volatility and/or the crash of the crypto market. In particular, Bitcoin futures have been blamed for the collapse of prices in December 2017. According to analysts of the San Francisco Federal Reserve, the rapid growth and subsequent fall in cryptocurrency prices “is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”

Annex – Glossary

Key terms Definition
Market capitalization Value of an asset calculated based on its current market (exchange) price. This economic indicator is used to assess the total aggregate value of market instruments, players, and markets. [Source: https://en.wikipedia.org].
Cryptocurrency market capitalization The market value of an individual coin or token circulating on the market.
Total cryptocurrency market capitalization The market capitalization of cryptocurrencies and digital assets, i.e. the aggregate market value of cryptocurrencies and digital assets (coins and tokens) circulating on the market.
Dominance Market share, i.e. the ratio of market capitalization of a particular cryptocurrency (coin, token) to total cryptocurrency market capitalization. Expressed as a %.
Not Mineable

 

A coin that is not mineable. The term is used for cryptocurrencies (coins, tokens) which cannot be mined or issued through mining.
Pre-mined A pre-mined coin. The term is used for cryptocurrencies (coins, tokens) which are issued through mining, and a certain number of coins (tokens) have been created and distributed among certain users at the start of the project.
The rate of market increase (as a % compared to the beginning of the year) The rate of market increase (as a % compared to the start of the year), i.e. by how many % points did market capitalization increase compared to the start of the year.
The growth rate of the market (as a % to the beginning of the year) The rate of market growth (as a % compared to the start of the year), i.e. by how many times did market capitalization grow compared to the start of the year.
Increase in market capitalization (in USD million compared to the previous period) Increase in cryptocurrency and digital asset market capitalization (in USD million compared to the previous period), i.e. by how many USD million did market capitalization increase over the period.
The rate of market increase (as a % compared to the previous period) The rate of market increase (as a % compared to the previous period), i.e. by how many % points did market capitalization increase over the period.
The market growth rate (as a % compared to the previous period) The market growth rate (as a % compared to the previous period), i.e. by how many times did market capitalization grow compared to the previous period.
Number of cryptocurrencies and digital assets Number of cryptocurrencies and digital assets. At the beginning of 2018 over 1,300 cryptocurrencies and digital assets (coins and tokens) were circulating on the market.
Average market capitalization Average market capitalization, i.e. the ratio of the market capitalization of all cryptocurrencies and digital assets to their number.
ZAK-n Crypto index The index is calculated as a percentage and represents a ratio between the trading volume (transactions) on cryptocurrency exchanges per day (Volume 24h) for n dominant cryptocurrencies to their total market capitalization.

ZAK-4 Crypto index calculations include four dominant cryptocurrencies with the greatest market capitalization: Bitcoin, Ethereum, Bitcoin Cash, and Ripple.

ZAK-8 Crypto index calculations include the trading volume and market capitalization for eight cryptocurrencies.


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