Please see our report devoted to the analysis of cryptocurrency market movements during 2018. Special attention has been given to the review of changes taking place in May 2018, most notably May 14-20, 2018.
Information as of May 21, 2018
This report was created by:
- Professor Dmitrii Kornilov, Doctor of Economics, Member of the Russian Academy of Natural Sciences, and Leading Analyst at ICOBox;
- Dima Zaitsev, PhD in Economics, Head of International Public Relations and Business Analytics Department Chief at ICOBox;
- Nick Evdokimov, Co-Founder of ICOBox;
- Mike Raitsyn, Vision Director of Snowfox Technology
- Anar Babaev, Co-Founder of ICOBox;
- Daria Generalova, Co-Founder of ICOBox
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 May 2018, including over the past week (May 14-20, 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 20, 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, %||20-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%||376.7||-3.4%|
|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%||235.6||-3.8%|
|Altcoin dominance, %||66.7%||60.1%||–||55.0%||–||62.8%||–||64.1%||–||62.8%||–||62.5%||–|
|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%||8 247.0||-3.2%|
|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%||140.6||-3.1%|
|Bitcoin dominance, %||33.3%||39.9%||–||45.0%||–||37.2%||–||35.9%||–||37.2%||–||37.3%||–|
|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%||697.9||1.6%|
|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%||69.5||1.7%|
|Ethereum dominance, %||21.1%||19.0%||–||14.8%||–||15.7%||–||17.3%||–||17.5%||–||18.4%||–|
|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%||1 183.2||-19.8%|
|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%||20.3||-19.7%|
|Bitcoin Cash dominance, %||4.9%||4.7%||–||4.4%||–||5.5%||–||6.4%||–||6.5%||–||5.4%||–|
|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%||135.3||-4.6%|
|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%||7.7||-4.4%|
|Litecoin dominance, %||1.7%||2.6%||–||2.5%||–||2.0%||–||2.1%||–||2.1%||–||2.0%||–|
|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%||8.4||-12.9%|
|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%||256.8||-3.4%|
|ZAK-4 Crypto index**||4.9%||3.2%||–||3.4%||–||4.2%||–||4.1%||–||3.6%||–||3.3%||–|
|4 crypto dominance, %||68.0%||71.6%||–||71.9%||–||66.1%||–||67.2%||–||68.2%||–||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%||10.1||-15.1%|
|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%||288.1||-3.9%|
|ZAK-8 Crypto index***||4.8%||3.2%||–||3.5%||–||5.0%||–||4.3%||–||4.0%||–||3.5%||–|
|8 crypto dominance, %||76.1%||79.4%||–||79.1%||–||75.5%||–||76.3%||–||76.9%||–||76.5%||–|
* Data as of May 20, 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 20, 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 14-20, 2018) cryptocurrency market capitalization decreased, and as of 03:00 UTC on May 20 equaled $376.7 billion (see Table 1.1).
The dominance of the four and eight largest cryptocurrencies as of 03:00 UTC on May 20, 2018, equaled 68.2% and 76.5%, respectively, with bitcoin dominance increasing to 37.3% (see Table 1.1). Despite the slight 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 PeepCoin (+467.95%), Docademic (+161.07%), Experience Points (+114.59%), WhiteCoin (+96.41%), CyberVein (+93.94%), Nework (+87.68%), EDUCare (72.20%), and others.
Last week cryptocurrency market capitalization fluctuated from $412 billion (max) to $362 billion (min) (Fig. 1), i.e. within a range of $50 billion. Bitcoin capitalization fluctuated from $151.3 billion (max) to $135.9 billion (min), i.e. within a range of $15.4 billion. In this regard, there was a very high correlation between the capitalization of the cryptocurrency market and Bitcoin (see Fig. 1). The maximum and minimum points and the configuration of the cryptocurrency market capitalization chart almost completely replicate those of the flagman – Bitcoin.
Figure 1. Capitalization of the cryptocurrency market and Bitcoin since May 14, 2018
Data source: coinmarketcap.com
The rise and fall of cryptocurrency prices over the past week (May 14-20, 2018)
During the period from May 14-20, 2018, the change in the prices of cryptocurrencies in the top 500 ranged from -55.95% (Odyssey) to +467.95% (PeepCoin).
A few words about (reasons behind) the changes in PeepCoin and Odyssey: the price of PeepCoin is growing based on the news of its upcoming 1:1 swap for Daps, a new private cryptocurrency. Odyssey (OCN) is the digital token of a platform that aims to create a decentralized economy of next generation shared access and a peer-to-peer ecosystem. His rate rose sharply on May 13 against the background of the official announcement of the network OCN, and then there was a correction course.
The price of 196 cryptocurrencies and digital assets from the top 500 showed growth. Twenty-nine cryptocurrencies in the list of the top 100 cryptocurrencies increased in price.
This past week the number of cryptocurrencies with a capitalization of more than $1 billion increased from 24 to 25, but the price of only five of them appreciated: Zcash (+41.20%), Binance Coin (+7.42%), Lisk (+5.63%), Ethereum (+2.99%), and TRON (+0.94%). Zilliqa (-16.48%) and Bitcoin Cash (-15.66%) experienced the largest downward adjustment among the 25 largest cryptocurrencies.
The significant growth in the Zcash price (+41.20%) is explained by the addition of this cryptocurrency to the Gemini exchange, which became the first exchange in New York to receive a license to trade in the privacy-focused coin. On May 14 the Zcash price increased from $250 to $350 in one hour, due to the addition of this “anonymous” coin to the Winklevoss brothers’ exchange (Gemini).
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 14-20, 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
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 20, 2018||Market capitalization, USD billion||Factors or events that might have led to a growth in cryptocurrency prices over the past week|
|1||Zcash||ZEC||41.20%||$347.96||1.38||Zcash increased in price by 40% on May 14 based on the news of its listing on the major cryptocurrency exchange Gemini Twitter|
Cortex won in the category most promising AI blockchain, and its price appreciated as a result Twitter
The positive news that led to the increase in the price of Decred was the announcement of the successful launch of the platform’s beta version Twitter
The main news of the week for iExec was the start of its cooperation with Intel, the largest manufacturer of computer chips Twitter
There were no major events that could have had a significant impact on the prices of the remaining cryptocurrencies and tokens, therefore we will simply remind you that Huobi Token is a digital token that was created by the developers of the Huobi exchange as an additional means of payment of transaction fees.
Fusion (FSN) is part of a project that hopes to create an ecosystem free from third parties for the performance of cryptocurrency conversion operations.
Populous (PPT) is a trading platform built on the Ethereum blockchain that allows the creation of invoices, something that every business needs.
KIN (KIN) is the digital token of the Kik Messenger platform, a free mobile application that makes it possible to safety (i.e. anonymously) exchange messages.
Komodo is one of the most secure cryptocurrencies in the world, since it uses the Delayed Proof of Work (dPoW) consensus mechanism with notarial nodes at its core.
CyberMiles is the internal token of the decentralized platform for the sale of goods online.
A depreciation in price was seen last week for 304 coins and tokens from the top 500 cryptocurrencies and digital assets by capitalization. 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
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 20, 2018||Market capitalization, USD billion||Factors or events that might have led to a fall in cryptocurrency prices over the past week|
|1||Mithril||MITH||-39.47%||$0.746508||0.23||The fall in Mithril can be explained through speculation by major players on exchanges or market volatility, as no important negative events took place. Mithril is a digital token of the eponymous decentralized social network, the ecosystem of which offers a solution to several problems. All participants in the social network can receive MITH tokens for creating content on the platform.|
Centrality is a venture studio that concludes agreements with leading innovators from various industries in order to create an applications marketplace. These applications allow users to manage their daily tasks through peer-to-peer transactions.
Zilliqa is a platform for creating decentralized applications, which differs from its competitors due to the network’s high throughput capacity (the week before last the Zilliqa price grew by 24% based on the news of its listing on the major cryptocurrency exchange OKEx Twitter, leading to a downward adjustment last week)
Bitcoin Cash relinquished its position this week mainly due to the uproar surrounding the claim against Roger Ver, the initiator of the hard fork and creator of the bitcoin.com website, where he promoted Bitcoin Cash. On May 15, 2018, a hard fork was performed in the Bitcoin Cash blockchain resulting in the size of a block increasing to 32 MB.
Aion is the digital token of a third generation blockchain platform. The idea behind the third-generation platform consists of the creation of sites where various projects can “communicate.”
Kyber Network (KNC) is a decentralized platform that performs the functions of a currency exchange and payment system.
PIVX is a decentralized open-source cryptocurrency, based on the principle of user anonymity.
Dentacoin (DCN) is a digital token based on Ethereum blockchain intended for use in the dental industry (the week before last its price increased by 30%, with a downward adjustment following last week).
Wanchain is the digital token of a decentralized platform, the main functions of which are providing banking services such as currency exchange, lending, and transaction services.
Cryptonex (CNX) is a digital currency that is completely decentralized and was developed on a unique platform.
|4||Bitcoin Cash||BCH||-15.66%||$1 223.21||20.96|
Data source: coinmarketcap.com
The change in price was calculated based on average daily data
Cryptocurrency market capitalization only changed slightly over the week.
Table 1.4 shows events that took place from May 14-20, 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 14-20, 2018
|№||Factors and events|
(link to source)
|Date of news||Description||Nature of impact||Type of impact|
|1.||LG Subsidiary Launches Enterprise Blockchain Platform ‘Monachain’ [source: CCN]||May 14, 2018||The platform, called Monachain, is intended for the provision of financial, production, and communications services.||Market ⇑||Favorable|
|2.||Ripple Launches Venture Capital Fund ‘Xpring’ to Build Ecosystem Around XRP Token [source: Coisnpeaker]||May 14, 2018||The company presented a new project called Xpring, through which it plans to provide financial support to firms developing products and services using XRP.||XRP ⇑||Favorable|
|3.||Ethereum Futures Live on Trading Platform Crypto Facilities [source: Btcmanager]||May 14, 2018||Investors can open both long and short positions. The launch of the new trading tool will be possible thanks to cooperation with liquidity providers Akuna Capital and B2C2.||ETH||Uncertain|
|4.||Investigation of South Korea’s Largest Crypto Exchange Upbit Continues [source: News.bitcoin.com]||May 16, 2018||The Financial Supervisory Service (FSS), South Korea’s main financial regulator, has joined the investigation into the activity of the largest cryptocurrency exchange in the country.||Market||Uncertain|
|5.||CME Group and Crypto Facilities launch Ether Reference Rate and Ether Real Time Index [source: Hedgeweek]||May 16, 2018||The leading North American derivatives exchange has launched an Ethereum orientation course and an ETH/USD index, with the support of the British fintech startup Crypto Facilities.||ETH||Uncertain|
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 $7.6 billion to $16.4 billion (Table 1.5.a). The value of the daily ZAK-4 Crypto fluctuated from 2.9% to 5.8% of capitalization. The highest trading volume was seen on May 3.
Table 1.5.a. Daily ZAK-4 Crypto index calculation (from May 1-20, 2018)
|Crypto||Bitcoin (BTC)||Ethereum (ETH)||Bitcoin Cash (BCH)||Ripple (XRP)||4 Crypto|
|Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Volume (24h) 4 crypto||Market cap 4 crypto||ZAK-4 Crypto index|
|Date*||$||USD billion||USD billion||$||USD billion||USD billion||$||USD billion||USD billion||$||USD billion||USD billion||USD billion||USD billion||%|
|May 20, 2018||8 247||5.2||140.6||698||2.2||69.5||1 183||0.8||20.3||0.68||0.3||26.5||8.4||256.8||3.3%|
|May 19, 2018||8 256||4.7||140.7||695||2.0||69.2||1 207||0.6||20.7||0.68||0.2||26.7||7.6||257.2||2.9%|
|May 18, 2018||8 092||5.8||137.9||672||2.3||66.9||1 202||0.9||20.6||0.67||0.3||26.1||9.3||251.4||3.7%|
|May 17, 2018||8 370||5.9||142.6||709||2.4||70.5||1 290||0.8||22.1||0.71||0.3||28.0||9.4||263.2||3.6%|
|May 16, 2018||8 504||6.8||144.9||708||2.5||70.4||1 342||0.9||23.0||0.70||0.4||27.3||10.6||265.6||4.0%|
|May 15, 2018||8 705||6.7||148.3||731||2.5||72.7||1 430||0.9||24.5||0.74||0.4||29.0||10.6||274.4||3.9%|
|May 14, 2018||8 713||7.4||148.4||733||3.0||72.8||1 489||1.2||25.5||0.74||0.6||29.2||12.1||275.9||4.4%|
|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%|
All figures given as of 03:00 UTC of the corresponding dayВсе значения представлены по состоянию на 03:00 UTC соответствующего дня
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 $10.1 billion by the end of last week (Table 1.5.b), i.e. 3.5% of their market capitalization, i.e. trading volumes fell below the level at the start of the month. The ZAK-4 Crypto and ZAK-8 Crypto indices are considered in more detail in Tables 1.5.a and 1.5.b.
Table 1.5.b. Daily ZAK-8 Crypto index calculation (continuation of Table 1.5.а)
|Crypto||Stellar (XLM)||Cardano (ADA)||EOS (EOS)||Litecoin (LTC)||8 Crypto|
|Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Volume (24h)||Market cap||ZAK-8 Crypto index|
|Date||$||USD billion||USD billion||$||USD billion||USD billion||$||USD billion||USD billion||$||USD billion||USD billion||USD billion||USD billion||%|
|May 20, 2018||0.32||0.03||5.9||0.243||0.10||6.3||13.2||1.23||11.4||135||0.32||7.7||10.1||288.1||3.5%|
|May 19, 2018||0.32||0.02||5.9||0.246||0.06||6.4||13.0||1.02||11.3||136||0.31||7.7||9.0||288.5||3.1%|
|May 18, 2018||0.31||0.03||5.8||0.243||0.08||6.3||12.4||1.34||10.7||133||0.37||7.5||11.1||281.7||3.9%|
|May 17, 2018||0.34||0.03||6.2||0.257||0.08||6.7||12.9||1.64||11.1||140||0.32||7.9||11.4||295.0||3.9%|
|May 16, 2018||0.35||0.04||6.4||0.259||0.11||6.7||12.9||1.53||11.1||140||0.35||7.9||12.6||297.7||4.2%|
|May 15, 2018||0.37||0.04||6.9||0.274||0.10||7.1||14.1||1.37||12.0||147||0.42||8.3||12.5||308.8||4.1%|
|May 14, 2018||0.38||0.06||7.0||0.286||0.16||7.4||14.9||1.70||12.8||145||0.58||8.2||14.6||311.3||4.7%|
|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.||Russia, Iran Discuss SWIFT-Free Interbank Settlements [source: Ethnews]||May 16, 2018||Tehran believes that cryptocurrency could be a useful tool to escape the influence of the US dollar, announced the head of the of the Iranian parliament’s commission for economic affairs.||Market ⇑|
|2.||It’s Not Bitcoin Trading — But J.P. Morgan Is Heading Deeper Into Crypto [source: Fortune]||May 17, 2018||Cryptocurrencies are real, but not the ones we have now: JPMorgan Chase previously held a conservative position, but now it turns out the bank has been studying the possiblity of blockchain for nearly a year.||Market ⇑|
|3.||Infosys Partners with 7 Banks for Blockchain Trade Finance Network [source: Coindesk]||May 17, 2018||The India Trade Connect blockchain-based network was developed to digitize the business processes involved in trade financing and covers areas such as title examination, document certification, and payments.||Market ⇑|
|4.||J.P. Morgan’s Former Head of Blockchain Amber Baldet Launches Decentralized App Store [source: Coisnpeaker]||May 17, 2018||The ex-head of the blockchain division at JP Morgan, Amber Baldet, announced that major global banks, including her former employer, may enter the cryptocurrency market in the near future.||Market ⇑|
1.2 Market trends
The weekly cryptocurrency and digital asset market trends from December 31, 2017, to May 20, 2018, are presented as graphs (Fig. 1.1-1.5).
Table 1.7. Legends and descriptions of the graphs
|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 20, 2018, this number had already reached 1,551 (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*
* 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 20, 2018. Over this period, market capitalization dropped from $572.5 billion to $379.3 billion, i.e. by 34%. Last week (May 14-20, 2018) cryptocurrency market capitalization decreased from $388.8 billion to $379.3 billion (as of May 20, 2018, based on the average figures from coinmarketcap.com).
Figure 1.2. Change in market capitalization
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. During the period from May 6-13 the market decline equaled $72 billion, or 16%, and last week it equaled 2% (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 1,551. Over the past week their number increased by three, from 1,548 to 1,551, and average capitalization equaled $244.5 million. In total, over the past month 80 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, EduCoin, Intelligent Investment…, and Influence Chain demonstrated high trading volumes.
Figures 1.4 and 1.5. Forecast of total cryptocurrency market capitalization
Right now, Bitcoin is the leader in capitalization, but its dominance is gradually slipping due to the appearance of more and more innovative coins and tokens on the cryptocurrency market. For example, in early 2017 Bitcoin dominance equaled 87%, but by the start of 2018 it had already fallen to 38%. During the three-month downward adjustment of the market (from January 7, 2018, to April 1, 2018) Bitcoin dominance partially recovered, reaching 45% (on April 1, 2018), but has now fallen once again to 37%. One of the reasons for the reduction in Bitcoin dominance has to do with mining costs, which according to experts (the article of Alex de Vries in the journal Joule) are growing steadily and will reach 0.5% of the world’s energy use by the end of 2018. At present, the bitcoin blockchain uses around 2.55 GW of electricity, which is comparable to Ireland’s electicity costs (3.1 GW). Only by finding a solution to this problem (for example, through the development of the Lightning Network) will Bitcoin be able to hold on to its dominate position.
The structure of the cryptocurrency market is constantly changing, and trends depend on many factors. Furthermore, many countries are already thinking about creating a national cryptocurrency: China, the United Kingdom, Israel, Japan, Russia, Turkey, Sweden, Switzerland, etc. In particular, according to Reuters, on May 17 the Swiss government asked for a report on the risks and possibilities of launching their own cryptocurrency, the so-called e-franc, which would use technology similar to bitcoin.
The launch of cryptocurrencies is also being planned in Hungary (Korona), Belarus (Taler), and Estonia (EstCoin). Venezuela was the first country to actually introduce a national cryptocurrency (El Petro).
Which cryptocurrencies will be dominate in the future?
In a rating of cryptocurrencies dated May 17, 2018, researchers from the China Center for Information Industry Development considered 28 cryptocurrencies based on the criteria of “technology,” “utility,” and “innovation.” Ethereum (ETH) took first place in their rating, with Bitcoin (BTC) only coming in 13th place:
1-10 places: #ETH, #STEEM, #LSK, #NEO, #KMD, #XLM, #ADA, #IOTA, #XMR, #STRAT
11-20 places: #QTUM, #BTS, #BTC, #XVG, #WAVES, #ETC, #XRP, #DASH, #SC, #BCN
21-28 place: #LTC, #ARK, #ZEC, #NANO, #BCH, #DCR, #HSR, #XEM.
A cryptocurrency rating (Weiss Cryptocurrency Ratings), drafted on January 24, 2018, by Weiss Ratings, caused many comments and discussion. In this rating, none of the 74 cryptocurrencies considered received the maximum rating of A, and only two (Ethereum and EOS) received a B. All the other cryptocurrencies received rating of B- to D (where A = excellent, B = good, C = fair, D = weak, and E = very weak). Bitcoin received a C+ in the rating, together with Ark, BitShares, Byteball Bytes, Dash, Decred, I/O Coin, Litecoin, and NEM.
A comparison of these ratings shows that expert opinions on individual cryptocurrencies differ greatly.
Annex – Glossary
|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 %.|
|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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