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 August 2018.
Information as of September 3, 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 cryptocurrency market changes during 2018. Special emphasis has been placed on an analysis of the changes that took place in August 2018.
1. General cryptocurrency and digital assets market analysis. Market trends
1.1 General cryptocurrency and digital assets market analysis
Table 1.1. Trends in capitalization of the cryptocurrency market and main cryptocurrencies from January 1, 2018, to September 1, 2018*
|Parameter||1-Jan-18||1-Apr-18||QoQ, %||1-July-18||QoQ, %||1-Aug-18||MoM, %||1-Sep-18||MoM, %|
|1||Total market capitalization, USD billion||612.9||263.9||-56.9%||257.7||-2.3%||277.8||7.8%||228.5||-17.7%|
|2||Altcoin market capitalization, USD billion||376.2||145.2||-61.4%||147.9||1.9%||144.3||-2.4%||107.0||-25.8%|
|Altcoin dominance, %||61.4%||55.0%||–||57.4%||–||51.9%||–||46.8%||–|
|3||Bitcoin price, $||14 112.2||7 003.1||-50.4%||6 411.7||-8.4%||7 769.0||21.2%||7 044.8||-9.3%|
|Bitcoin market capitalization, USD billion||236.7||118.7||-49.9%||109.8||-7.5%||133.5||21.6%||121.5||-9.0%|
|Bitcoin dominance, %||38.6%||45.0%||–||42.6%||–||48.1%||–||53.2%||–|
|4||Ethereum price, $||755.8||397.3||-47.4%||455.2||14.6%||433.9||-4.7%||283.5||-34.7%|
|Ethereum market capitalization, USD billion||73.1||39.1||-46.4%||45.7||16.8%||43.8||-4.1%||28.8||-34.2%|
|Ethereum dominance, %||11.9%||14.8%||–||17.7%||–||15.8%||–||12.6%||–|
|5||Bitcoin Cash price, $||2 534.8||688.0||-72.9%||749.2||8.9%||780.0||4.1%||544.0||-30.3%|
|Bitcoin Cash market capitalization, USD billion||42.8||11.7||-72.6%||12.9||9.9%||13.5||4.4%||9.4||-30.0%|
|Bitcoin Cash dominance, %||7.0%||4.4%||–||5.0%||–||4.8%||–||4.1%||–|
|6||Litecoin price, $||231.7||116.9||-49.5%||81.5||-30.3%||80.4||-1.4%||61.7||-23.2%|
|Litecoin market capitalization, USD billion||12.6||6.5||-48.3%||4.7||-28.6%||4.6||-0.6%||3.6||-22.6%|
|Litecoin dominance, %||2.1%||2.5%||–||1.8%||–||1.7%||–||1.6%||–|
|7||Volume (24h) 4 crypto, USD billion||15.7||6.4||-59.2%||7.1||11.3%||7.5||5.4%||6.4||-14.6%|
|Market cap 4 crypto, USD billion||441.6||189.7||-57.0%||186.7||-1.6%||207.9||11.4%||173.0||-16.8%|
|ZAK-4 Crypto index**||3.6%||3.4%||–||3.8%||–||3.6%||–||3.7%||–|
|4 crypto dominance, %||72.0%||71.9%||–||72.4%||–||74.8%||–||75.7%||–|
|8||Volume (24h) 8 crypto, USD billion||17.2||7.2||-58.0%||8.2||14.1%||8.7||5.2%||7.6||-12.4%|
|Market cap 8 crypto, USD billion||488.6||208.7||-57.3%||205.9||-1.4%||228.2||10.8%||189.2||-17.1%|
|ZAK-8 Crypto index***||3.5%||3.5%||–||4.0%||–||3.8%||–||4.0%||–|
|8 crypto dominance, %||79.7%||79.1%||–||79.9%||–||82.1%||–||82.8%||–|
* Data as of September 1, 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 (not including Tether) are used. At present (September 3, 2018), the cryptocurrencies Bitcoin, Ethereum, Ripple, Bitcoin Cash, Cardano, Litecoin, Stellar, and EOS are used to calculate the ZAK-8 index.
**** This report uses the data of ICOBox, ICOBox Blockchain Research Center (IBRC), and coinmarketcap.com
During August 2018 cryptocurrency market capitalization decreased from $277.8 billion to $228.5 billion (as at 03:00 UTC on September 1, 2018), i.e. by nearly $49 billion or 17.7% (see Table 1.1, Fig. 1). The fall in cryptocurrency market capitalization by $12 billion was due to a depreciation of the main cryptocurrency, with the aggregate impact of altcoin depreciation on capitalization equaling $37 billion. Bitcoin dominance increased significantly during August, from 48.1% to 53.2%.
The dominance of the four and eight largest cryptocurrencies as of 03:00 UTC on September 1, 2018, equaled 75.7% and 82.8%, respectively.
During August cryptocurrency market capitalization fluctuated from $191.1 billion (min) to $277.8 billion (max) (Fig. 1a), i.e. within a range of $86.7 billion. For its part, bitcoin capitalization fluctuated from $103.2 billion (min) to $133.5 billion (max), i.e. within a range of $30.3 billion.
The most significant changes in cryptocurrency market capitalization since the start of August 2018 are shown in Fig. 1a.
On August 14 cryptocurrency market capitalization fell below $200 billion for the first time in 2018, reaching the level of November 2017.
Figure 1a. Cryptocurrency market capitalization since August 1, 2018
Data source: coinmarketcap.com
The changes in capitalization can be partially explained by a number of events (see the comments below and Table 1.4):
- From the start of August to August 14 there was a general trend toward a fall in capitalization, caused in large part by the actions of the SEC when considering applications on bitcoin ETFs. In particular, the plunge on August 7-8 was due to the SEC postponing the decision on the VanEck and SolidX bitcoin ETFs until the autumn, whereupon the bitcoin price dropped to $6,500;
- Growth after August 17: Tether’s capitalization increased by $280 million over the course of one hour, from $2.4 billion to $2.68 billion (August 17), and by September 3 had increased to $2.83 billion.
- The crash of August 23: The US Securities and Exchange Commission rejected nine applications to issue bitcoin ETFs all at once, two of which were submitted jointly by ProShares and the NYSE Arca exchange; The Chinese messenger WeChat blocked accounts with news on blockchain and cryptocurrencies; and access to foreign cryptoexchanges was blocked in China.
Figure 1b shows bitcoin capitalization (red line) superimposed on cryptocurrency market capitalization (blue line).
A growth in bitcoin dominance has been seen since early May, from 36% to 53%, with this dominance increasing by more than 5% in August.
Figure 1b. Capitalization of the cryptocurrency market (blue) and bitcoin (red) since August 1, 2018
Data source: coinmarketcap.com
Price trends of the cryptocurrency market leaders during August 2018
Table 1.2 presents the price trends of the top 10 cryptocurrencies in August 2018 (not including Tether). The prices of all cryptocurrencies from the top ten depreciated.
The price fluctuation index (High/Low) equaled from 1.24 to 2.12. Bitcoin and Stellar showed the most stable prices of the ten presented currencies (with due account of the average daily data of the coinmarketcap.com website). For example, Bitcoin had a High/Low of 7769/6287.9=1.24, and Stellar had a High/Low of 0.282/0.222=1.27. Cardano experienced the most significant fluctuations, with the high and low prices for this cryptocurrency differing by a factor of 2.12, ranging from $0.979 to $0.462 (see Table 1.2).
Table 1.2. Price changes in the top 10 cryptocurrencies by capitalization during the period from August 1 to September 1, 2018
|№||Name||Price Open, $||MoM,||Price change during August||High / Low|
|Aug 1, 2018||Sep 1, 2018||%||High, $||Low, $||D, $|
|Portfolio 10 crypto||-21.1%|
*This report uses the data of ICOBox, ICOBox Blockchain Research Center (IBRC), and coinmarketcap.com
Thus, during August 2018 the price change of the leading cryptocurrencies by capitalization compared to the start of the month (Fig. 2) ranged from -4.9% (Monero) to -30.3% (Bitcoin Cash). The average portfolio return (Portfolio 10 crypto) for August for a portfolio consisting of equal shares of the top 10 cryptocurrencies was negative and equaled -21.1%. Overall, cryptocurrency market capitalization decreased during August from $277.8 billion to $228.5 billion, i.e. by -17.7%.
Figure 2. Price change in the top 10 cryptocurrencies by capitalization during August 2018 (not including Tether), %
(On the left the cryptocurrencies are ranked by the level of price depreciation over the month, and on the right – by the amount of capitalization as of September 1, 2018)
Bitcoin dominance on the market increased during August from 48% to 53%, which indicates the high sensitivity of altcoins to negative news and the shifting preference of backers from altcoins to the more stable bitcoin under bearish market conditions. A sharp decline in the entire market was seen from August 7-14, especially among altcoins. For example, in the space of a week the Ethereum price fell from $410 to $250.
However, a positive trend has been observed since August 24, with the market slowing starting to gain traction. The real turning point was when the SEC announced the possible reconsideration of its decision on bitcoin ETFs (Coinspeaker).
The movement of the Monero price can be noted separately. This is the only cryptocurrency from the top 10 by capitalization whose price fell by less than Bitcoin. The price of this cryptocurrency remained practically the same during August. As can be seen in the graph, despite the fact that its price consistently moved in tandem with market trends, a strong growth over the last few days leveled off all the losses seen earlier in the month. This can be attributed to the very positive report from the Satis Group analytical firm, which refers to possible growth in the Monero price by more than 1,000% over the year (ccn.com).
The difference between the starting and ending price of EOS for the month also looks less dismal than the average for the other top 10 coins. After dropping by only 12.5%, EOS is one of the three cryptocurrencies that lost the least during August. This may be the result of the positive news at the end of the month on the implementation of a voting system in the EOS network (coindesk.com).
The tremendous fall of Ethereum due to the massive sale of ETH by ICOs during August (rustnodes.com) must also be mentioned. Generally speaking, the popularity of ICOs does not play into the hand of the Ethereum price, since most of the funds collected in Ethereum are sold by ICO projects to finance the development of startups, especially during a period of general reduction in capitalization.
Calculation of the index of trading activity on cryptocurrency exchanges
To analyze trading activity on cryptocurrency exchanges, the ZAK-n Crypto index is calculated (see the Glossary). In early September the 24-hour trading volumes (Volume 24h) for the four and eight dominant cryptocurrencies were approximately half of what they were at the start of the year (Table 1.1).
The values of the ZAK-4 Crypto indices are presented in Tables 1.1 and 1.3. In August the 24-hour trading volumes (Volume 24h) for the four dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple) equaled from $4.9 billion to $7.9 billion (Table 1.3). The value of the daily ZAK-4 Crypto fluctuated from 2.9% to 5.2% of capitalization. The highest trading volume was seen on August 14, when the change in market trends took place (Fig. 1a). As of September 2 the 24-hour trading volume of the four dominant cryptocurrencies equaled $6.5 billion, i.e. 3.6% of their market capitalization (Table 1.3).
Table 1.3. Daily ZAK-4 Crypto index calculation (from August 1 to September 2, 2018)
|Crypto||Bitcoin (BTC)||Ethereum (ETH)||Bitcoin Cash (BCH)||Ripple (XRP)||4 Crypto|
|Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Price Open||Volume (24h)||Market cap||Volume (24h) 4 crypto*||Market cap 4 crypto||ZAK-4 Crypto index|
|Date*||$||USD billion||USD billion||$||USD billion||USD billion||$||USD billion||USD billion||$||USD billion||USD billion||USD billion||USD billion||%|
|Sep 2, 2018||7 190||4.3||124.0||295||1.3||30.0||616||0.6||10.7||0.35||0.2||13.8||6.5||178.5||3.6%|
|Sep 1, 2018||7 045||4.1||121.5||284||1.5||28.8||544||0.5||9.4||0.34||0.3||13.3||6.4||173.0||3.7%|
|Aug 31, 2018||6 974||4.5||120.2||284||1.4||28.9||539||0.3||9.3||0.34||0.2||13.3||6.4||171.8||3.7%|
|Aug 30, 2018||7 044||4.5||121.4||290||1.5||29.4||554||0.3||9.6||0.34||0.3||13.7||6.6||174.1||3.8%|
|Aug 29, 2018||7 092||4.1||122.2||296||1.5||30.1||564||0.3||9.8||0.35||0.3||13.9||6.2||176.0||3.5%|
|Aug 28, 2018||6 891||4.7||118.8||287||1.5||29.1||545||0.4||9.4||0.34||0.3||13.4||6.9||170.7||4.1%|
|Aug 27, 2018||6 711||4.0||115.6||275||1.4||28.0||523||0.3||9.1||0.32||0.2||12.8||6.0||165.5||3.6%|
|Aug 26, 2018||6 755||3.3||116.4||280||1.2||28.4||536||0.3||9.3||0.33||0.2||13.0||4.9||167.0||3.0%|
|Aug 25, 2018||6 720||3.3||115.8||283||1.2||28.8||535||0.3||9.3||0.33||0.2||13.0||5.0||166.8||3.0%|
|Aug 24, 2018||6 552||4.1||112.9||278||1.5||28.2||532||0.3||9.2||0.33||0.2||12.9||6.1||163.2||3.7%|
|Aug 23, 2018||6 371||3.4||109.7||272||1.3||27.6||519||0.3||9.0||0.32||0.2||12.6||5.2||158.9||3.3%|
|Aug 22, 2018||6 486||4.7||111.7||282||1.5||28.6||535||0.3||9.3||0.33||0.3||13.2||6.8||162.8||4.2%|
|Aug 21, 2018||6 301||3.4||108.5||273||1.2||27.7||514||0.3||8.9||0.32||0.2||12.5||5.1||157.7||3.2%|
|Aug 20, 2018||6 501||3.7||111.9||301||1.4||30.6||570||0.4||9.9||0.34||0.3||13.6||5.8||165.9||3.5%|
|Aug 19, 2018||6 423||3.3||110.6||296||1.4||30.0||555||0.4||9.6||0.33||0.3||12.9||5.5||163.1||3.4%|
|Aug 18, 2018||6 583||4.0||113.3||317||1.8||32.1||598||0.4||10.3||0.36||0.4||14.3||6.6||170.1||3.9%|
|Aug 17, 2018||6 341||5.0||109.2||288||2.0||29.2||517||0.5||8.9||0.29||0.5||11.5||7.9||158.8||5.0%|
|Aug 16, 2018||6 294||4.3||108.3||283||1.6||28.7||513||0.4||8.9||0.28||0.2||11.1||6.5||157.0||4.2%|
|Aug 15, 2018||6 221||4.9||107.1||280||1.9||28.4||513||0.4||8.9||0.28||0.3||10.9||7.5||155.3||4.8%|
|Aug 14, 2018||6 288||5.3||108.2||286||2.1||29.0||535||0.4||9.3||0.28||0.3||11.0||8.1||157.4||5.2%|
|Aug 13, 2018||6 341||4.1||109.1||320||1.8||32.4||571||0.4||9.9||0.30||0.2||11.7||6.4||163.1||4.0%|
|Aug 12, 2018||6 284||5.7||108.1||321||1.6||32.5||564||0.3||9.8||0.30||0.2||11.8||7.8||162.2||4.8%|
|Aug 11, 2018||6 186||4.0||106.4||334||1.8||33.8||572||0.3||9.9||0.32||0.3||12.6||6.5||162.8||4.0%|
|Aug 10, 2018||6 571||4.5||113.0||366||1.7||37.0||610||0.3||10.5||0.35||0.2||13.6||6.8||174.2||3.9%|
|Aug 9, 2018||6 306||4.3||108.4||357||1.6||36.1||591||0.4||10.2||0.33||0.3||13.1||6.6||167.9||3.9%|
|Aug 8, 2018||6 747||5.1||116.0||380||2.0||38.4||660||0.5||11.4||0.38||0.4||15.0||7.9||180.8||4.4%|
|Aug 7, 2018||6 958||4.7||119.6||407||1.8||41.2||693||0.4||12.0||0.41||0.2||16.3||7.1||189.0||3.8%|
|Aug 6, 2018||7 063||3.9||121.4||411||1.4||41.5||711||0.3||12.3||0.43||0.2||17.1||5.9||192.3||3.1%|
|Aug 5, 2018||7 031||3.7||120.9||407||1.4||41.2||696||0.3||12.0||0.43||0.2||16.8||5.6||190.9||2.9%|
|Aug 4, 2018||7 439||4.3||127.9||418||1.5||42.3||723||0.3||12.5||0.44||0.2||17.3||6.2||200.0||3.1%|
|Aug 3, 2018||7 562||4.6||130.0||413||1.7||41.7||733||0.4||12.7||0.43||0.3||16.9||7.0||201.2||3.5%|
|Aug 2, 2018||7 634||4.2||131.2||421||1.6||42.5||768||0.4||13.3||0.45||0.2||17.6||6.4||204.5||3.1%|
|Aug 1, 2018||7 769||4.8||133.5||434||1.9||43.8||780||0.5||13.5||0.44||0.3||17.1||7.5||207.9||3.6%|
* Adjusted Volume – Volume from spot markets excluding markets with no fees and transaction mining
** All figures given as of 03:00 UTC of the corresponding day
*** This report uses the data of ICOBox, ICOBox Blockchain Research Center (IBRC), and coinmarketcap.com
The daily trading volume on cryptoexchanges was overstated by $6 billion, which is why coinmarketcap.com calculates two trading volume figures: Adjusted Volume and Reported Volume.
According to data from the report of the Blockchain Transparency Institute (BTI): “Current metrics used to determine exchange rankings by coinmarketcap, even with the new ‘Adjusted Volume’ parameters, have still left most in the industry questioning their methodology. A new system was developed by BTI to provide better transparency for the crypto sphere on true exchange volumes. In the following report we have discovered at least 7 of the top 10 exchanges engaging in excessive wash trading from 12x to over 100x their true volume. We have also highlighted more trustworthy exchanges which move up 40-60 places in the true rankings list.”
We already touched upon this issue in a previous report. In particular, trading on the Singapore-based BitForex cryptoexchange (registered in the Seychelles), which only started in June 2018, is already in first place in the trading volume rating (see Fig. 3b).
Figures 3a and 3b show the rating of cryptoexchanges by trading volumes with and without the adjustment, according to the data of coinmarketcap.
Data source: coinmarketcap.com (September 3, 2018)
* Adjusted Volume – Volume from spot markets excluding markets with no fees and transaction mining
Figure 3b. Top 5 cryptocurrencies by 24-hour trading volume**
Data source: coinmarketcap.com (September 3, 2018)
** Reported Volume
Table 1.4 shows the main events that took place since the start of August 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 having an influence on cryptocurrency prices in August 2018
|№||Factors and events|
(link to source)
|Date of news||Description||Nature of impact||Type of impact|
|1.||Japan’s Licensed Crypto Exchanges Formally Apply for Self-Regulatory Body|
|August 7, 2018||An association of Japanese cryptoexchanges may receive a new status. This will allow it to establish rules for working in this area in the country.||Market ⇑|
|2.||SEC Delays VanEck-SolidX Bitcoin ETF Decision to September|
|August 7, 2018||There will be a bitcoin ETF, only later: the American regulator has postponed the consideration of applications from two New York-based companies. Sources had previously said that the application would probably be approved.||Market ⇓||Unfavorable|
|3.||U.S. Investors Can Now Buy the Swedish Exchange-Traded BTC Note|
|August 16, 2018||A new solution has appeared for American traders – an ETN tied to the US dollar.||Market ⇑|
|4.||124 Foreign Crypto Exchanges to be Forced Out of the Country by Chinese Authorities|
|August 23, 2018||ICOs and cryptocurrency trading are already banned in China. Now the authorities have started blocking websites: the country’s regulator found 124 trading platforms being used by citizens and announced that it would block access to them in the near future.||Market ⇓||Unfavorable|
|5.||India’s Central Bank Quietly Forms New Cryptocurrency, Blockchain Research Unit|
|August 27, 2018||The country’s authorities have been trying to introduce regulations for the industry since this spring, but for now only bans are in effect. The government and the Central Bank continue to study cryptocurrencies and blockchain, noting that the first initiatives may appear in the autumn.||Market ⇑|
|6.||$6 Billion Daily Crypto Volume is Being Faked, How Can it be Combated?|
|August 28, 2018||Some cryptoexchanges such as Bittrex, Kucoin, and Bithumb indicated accurate trading volumes, as their unique visitor counts are proportional to their trading volume. However, most exchanges have only tens of thousands of unique visitors but hundreds of millions in daily trading volume, showing figures that are at variance with the facts.||Market ⇓||Unfavorable|
|7.||Chinese Search Giant Baidu Has Officially Began Censoring Cryptocurrencies|
|August 28, 2018||The ban has partially come into force — several forums on digital assets have already been blocked. However, information on certain cryptocurrencies is still available.||Market ⇓||Unfavorable|
|8.||Barclays Bank Will Accelerate Transactions Using Ethereum Blockchain|
|August 30, 2018||Following in its competitors’ footsteps, one of the largest British banks continues to implement blockchain technology in its projects. Soon users of the Barclaycard app will be transferred to the new Crowdz platform — at first, only a small number of clients will take part in the testing, with the pilot being fully launched after the process has been debugged.||Market ⇑|
|9.||Japanese Police Forces Move to Track All Bitcoin Transactions|
|August 31, 2018||The National Police Agency may receive the data necessary to investigate thefts and abuses from open sources and track which cryptoexchange operators were involved in them.||Market ⇓||Unfavorable|
During a downward adjustment on the cryptocurrency market there is usually a fairly close correlation between the overall trend and the prices of most cryptocurrencies. According to the resource sifrdata.com (Fig. 4), this close correlation has been seen over the past six months between the indicators of crypto market leaders Bitcoin, Ethereum, Ripple, Bitcoin Cash, and Litecoin and the other cryptocurrencies (area highlighted in red).
Figure 4. Correlation between cryptocurrencies
Data source: sifrdata.com (on August 30, 2018)
It is thought that the closer the correlation coefficient is to 1, the higher the similarity of changes in cryptocurrency price trends. If the coefficient is around zero, there is no correlation between the indicators. If the indicator is around -1, there is an inverse relationship. In the blue zone there is no correlation. Therefore, no direct dependency between the cryptocurrencies and the S&P 500 Index (^ SPX), the CBOE volatility index (^ VIX), the shares of SPDR Gold (^ GLD), and CBOE 10-year treasury bonds (^ TNX) was seen over the past 180 days.
Table 1.5 gives a list of events that could impact both the prices of specific cryptocurrencies and the market in general.
Table 1.5. 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.||Australia’s Biggest Bank Launches World’s First Blockchain Bond with World Bank|
|August 10, 2018||This became possible as part of the implementation of the World Bank’s mandate to reduce poverty in the world.||Market ⇑|
|2.||Chinese State-Owned Aerospace Firm Turns to Blockchain to Manage Billions of Invoices|
|August 14, 2018||Cheaper, easier, quicker: the Chinese Aerospace Science and Industry Corporation Ltd. has developed a blockchain system for the tax service.||Market ⇑|
|3.||SEC to Reconsider the Latest Rejection of Three Bitcoin ETFs|
|August 24, 2018||The decision on nine bitcoin ETFs is not final. A representative of the American Securities and Exchange Commission has announced that the regulator may reconsider its refusal.||Market ⇑|
|4.||Iran Seen as Removing Crypto Ban by End-September|
|August 28, 2018||The removal of the ban is connected with the country’s issue of its own cryptocurrency. The government has already prepared the legislative base for regulation of the digital market.||Market ⇑|
|5.||Poland Introduces New Bill to Clarify Crypto Taxation|
|August 29, 2018||There is still no world consensus on the policy for taxation of crypto trading. The issue was first raised in the USA in 2014, which announced that cryptocurrencies are a commodity just like gold or real estate. Poland started working on a draft law this spring.||Market ⇑|
1.2 Market trends
The weekly cryptocurrency and digital asset market trends from December 31, 2017, to September 2, 2018, are presented as graphs (Fig. 1.1-1.5).
Table 1.6. 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 September 2, 2018, this number had already reached 1,824 (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 trend)
* 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 September 2, 2018. Over this period, market capitalization dropped from $572.5 billion to $237.2 billion, i.e. by 59%. Last week (August 27-September 2, 2018) cryptocurrency market capitalization increased from $214.3 billion to $237.2 billion (as of September 2, 2018, based on the average figures from coinmarketcap.com).
Figure 1.2. Change in market capitalization (weekly trend)
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 was $136 billion, or 23%, during the week of 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.
Six of the thirteen weeks in the second quarter were “in the red.” The market grew based on the results of the other seven weeks. As noted earlier, a growth was seen in April, while in May and June there was generally a reduction in capitalization.
Five of the past nine weeks in the third quarter have shown a growth in capitalization, and four a decrease (with due account of average daily data of coinmarketcap.com, see Fig. 1.2). On the whole, since the beginning of August capitalization has fallen by approximately $40 billion.
Figure 1.3. Number of cryptocurrencies and digital assets (weekly trend)
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 presented on coinmarketcap.com has increased from 1,335 to 1,910. However, when calculating cryptocurrency market capitalization only those coins and tokens on which there is information on trading volume (turnover) are considered. Over the past week their number increased from 1,801 to 1,824, and average capitalization increased to $130 million. In total, over the past month 176 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. Among the tokens that were added to coinmarketcap.com last week, Traceability Chain, EliteShipperToken, and WinToken showed high trading volumes.
Figures 1.4 and 1.5. Forecast of total cryptocurrency market capitalization
Looking at the results for the last week, one can see a positive trend on the cryptocurrency market, as well as a partial change in the correlation in the rise and fall of the prices of a number of coins and tokens. The overall trend for the month is negative. The dominance of the cryptocurrency market leader, bitcoin, continues to gain momentum, with it getting harder and harder for altcoins to survive on the bear market. This is due to the higher sensitivity of most altcoins to overall trends, as a result of their high elasticity and volatility.
When the capitalization of many coins and tokens decreases, the fall in trading volume also becomes more pronounced. At the same time, the number of cryptoexchanges has increased, as has the competition between them to win new and retain existing unique visitors. The net result is that, in order to attract attention to their operations, many cryptoexchanges indicate figures that cannot be substantiated, thereby climbing to a higher ranking in the rating of demand. The infrastructure is ready for higher workloads and for the use of new trade mechanisms. However, for now only the outflow of funds is being seen. Perhaps the decision on bitcoin ETFs will trigger new growth. Exchange-traded funds (ETFs) could quickly ensure a new influx of funds to this segment by major backers and a growth in capitalization over the medium term.
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: 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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