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Bitcoin & Bear market, Ripple overvalued, Crypto scam: Market analysis
January 28  |  8 min read

Crypto Week #4 Overview

COIN360 Editorial Team

We’re closing in on the longest bear market ever, and we've discovered XRP’s second place in market cap may be undeserved. Coins are moving within tight corridors, and, while price projections are not the most optimistic, positive advances in regulation stood out among the week’s headlines.

Here’s what you need to know about about the past week:

1. Cryptocurrency market analysis

This week Bitcoin moved up and down within a $3,539 - $3,700 corridor. On Sunday it plummeted from the comfortable $3.7K that it sustained during most of the weekend (this week’s high point, if your calendar begins weeks on Sundays), to $3,583 on Monday 21st. Unable to break past $3.6K in the following hours, BTC reached its weekly low point at $3,539 on Tuesday 22nd. From there things generally looked up: within the same day, the coin peaked at $3,620, and swung back to peak at $3,621 on Wednesday 23rd, a 2.3% gain on Tuesday’s low. Before the 23rd was done, it crashed back to $3,565, and peaked again at $3,613 on Thursday 24th (a 1.3% spike). Finally, Friday 25th saw Bitcoin’s price move from $3,575 to a $3,605 peak. At press time, Bitcoin is back under $3,600, trading at $3,584 for a 0.58% loss on the day and a 1.71% loss on the week. In total, BTC has lost approximately 3% since its high point last Sunday 20th.

Ethereum started last weekend in a similar position as BTC: high (relative to the week to come) and stable. On the 20th it managed to drop 4% from $124 to $119, and it kept dropping till it hit $116,3 on the 21st. It recuperated to $118 during the same day, but fell dramatically fast to $115.2 on the 22nd. Bouncing back just as quickly, the 23rd saw Ethereum’s price peak at $119.6 and bottom at $116.03. But the week’s lowest point is held at press time, Friday 25th, at $115.83 – a 6.5% loss from the high point of the 20th, a 4.43% loss on the week and an 1.44% loss on the week.

Ripple has been depreciating quite steadily since it peaked at $0.44 last Christmas Eve. XRP has been unable to surpass $0.34 since January 10th, and this week only seemed to reaffirm the downtrend. Ripple’s Sunday crash was a 5.7% loss from $0.332 on the 20th, to the week’s lowest point, $0.313, on the 22nd. XRP quickly bounced back 2.18% to $0.320 during that same day. Passing through a dip to $0.314 and another mild peak at $319 on the 24th, XRP is currently trading at $316 for a 0.63% loss on the day and a 3% loss on the week. The news that XRP’s market cap and circulating supply may be overvalued (see section 3, below) did not seem to hit the asset hard. It has not even fallen from second place.

EOS has a more pronounced pattern this week than the previously mentioned coins. There’s a sharp crash of 5.6% on the 20th, from $2.48 to $2.34. This position remained more or less stable, hovering between $2.39 and $2.33 on the 21st until a 2.5% surge left it at $2.49 on the 22nd. The rest of the week moved between $2.47 (23rd’s max) and $2.41 (24th’s min). At press time, the price of EOS is at $2.49 for a 0.2% gain on the day and a 0.32% loss on the week.

TRX seems to be moving independently from its peers. Its 19th – 20th weekend was not as stable as the previously mentioned altcoins. Rather than a Sunday crash, TRX just saw a 14% surge (the largest of the coins covered, proportional to price) that began at $0.0238 on Monday 21st and lasted till Wednesday 23rd, when the week’s max was reached at $0.0272. There was not much of a Tuesday 22nd slump. Instead, the slump hit on the 23rd ($0.0262). The TRX coin bounced back and reached $0.0271 within the day. Price has since fallen slightly, but at press time, TRON (TRX) is the only coin covered trading completely in the green: $0.0272 for a 1.1% gain on the day and a 9.5% gain on the week.

2. Bitcoin days away from breaking bear market record

On February 2nd 2019, BTC will most likely set a new record for the longest bear market in the history of cryptocurrencies. Unless the price of BTC were to suddenly rise above $16K (a miraculous 357% surge), the current record for longest downtrend – the estimated 420 day long stagnation of 2013/2015 – will be set aside to second place.

Traditionally, a 20% drop from the all-time high is considered a bear market. It is difficult to say exactly how long a bear market has lasted, but in this case, most estimates on crypto media outlets are counting from BTC’s all-time high of approximately $19,700 on December 17th, 2017. As we draw closer to the date, commentators on Twitter are sharing various insights, such as the idea that each bear market should extend longer than the previous due to each bull market lasting longer and going higher than the previous, or that the percentage of the decline is more meaningful than the duration of a downtrend. Analysts from JP Morgan on the other hand are pessimistic, stating that BTC has stayed low past the point of no return and might fall below $1260 if the bear market continues.

3. Ripple overvalued, analyst receives threats

The analytics startup Messari reported this week that XRP’s market capitalization and circulating supply may have been significantly overvalued: by up to $6B. Messari used data from exchanges and third party crypto data services to study the legitimacy of Ripple’s market cap and found that while the liquid circulating supply of XRP could be overestimated by 48%, its total market cap would be $6.9 billion, rather than instead of $13B. Shortly after this report came out, Ripple’s own Q4 2018 report surfaced – the company claims to have sold $535.5M in XRP last year.

Later in the week, Ryan Selkis, founder of Messari, actually received harassment on Twitter (some of it by the hands of the so-called XRPArmy,) and threats on over the phone, including a caller that simply “ recited (his) wife’s birthday (…) then hung up.” Selkis has not spoken out to blame Ripple for the threats, but he has insisted that company publicly denounce the threats .

4. Georgia’s crypto mining still going strong

Back in April 2018, Georgia already ranked second in crypto-mining worldwide (behind China). So for months now, and even in the face of (what is soon to be) the longest bear market in crypto history, Georgia continues to mine Bitcoin at an impressive rate, with Bitfury accounting for most of the activity.

Cryptocurrency mining has enjoyed full government support in Georgia: a $10M loan to Bitfury by an ex prime minister in 2015, 45 acres of land sold for $1 to the same company, tax-free zones and energy 50% cheaper than in Europe have ensured that 10% of the country’s energy goes into crypto. Georgia is now fighting to outshine Malta and Bermuda as crypto paradises.

5. IMF visits Malta and warns of trading scams

After a visit to the island of Malta, the International Monetary Fund reported significant risks of money laundering and terrorism financing as the island pushes blockchain and crypto-related bills through parliament. Although Prime Minister Joseph Muscat is a proponent of cryptocurrencies, the Malta Financial Services Authority (MFSA) has been skeptical due to the scam known as “Bitcoin Revolution”.

The MFSA reports the company is illustrated as a get-rich-quick scheme through alongside other sites. Although Bitcoin Revolution advertises on social media as an endorsed entity under the Virtual Financial Assets Act, the IMF and MFSA say it all points to a major scam.

6. Lichtenstein and Switzerland’s cold alps thrive during crypto winter

Lichtenstein and Switzerland’s active support of blockchain has proven successful, as the number of blockchain firms has continued to show growth. 121 new companies have been registered, accounting for a 20% growth. Although the recent drop in crypto prices has cut the market value in both countries from $44 billion to $20 billion in Q4 2018, companies continue to find use for distributed ledger technology.

Companies in the region include four “unicorns” with startups valued at over $1billion. These include Bitmain, Cardano, Dfinity Foundation, and Ethereum. With Swiss banks like Falcon Private Bank announcing direct cryptocurrency transfer, alongside favorable laws and support by Swiss Federal Council, it’s clear the the alps are a promising location for the crypto community.

7. Crypto scams and hackers

A 36-year-old man was arrested in the UK after international police tracked him down as the main suspect in the disappearance of $11M in IOTA belonging to 85 victims as well as fraud and money laundering. Meanwhile in Iceland, a man has been sentenced to four and a half years in prison for stealing $2M worth of Advania Bitcoin miners.

Finally, the blockchain prediction market Stox and its founder, Moshe Hogeg, were sued for $4.6 million by investor Zhewen Hu over alleged fraud. The man (who allegedly invested around $3.8 million in ETH on the platform) claims that, although the 2017 Stox ICO reached $34 million, Hogeg only invested $5 million in the company and used the rest to invest in other ICOs, including Telegram. Moshe Hogeg is also the founder of Sirin Labs, owner of Beitar Jerusalem Footbal Club, and chairman of LeadCoin.

8. Crypto regulations making progress during US gov shutdown

While the government shutdown has led to the tabling of major developments for cryptocurrency regulation, the state of Pennsylvania has established ruling clarifying that only fiat currency is required to have Money Transmission Business Licensing. When it comes to virtual currency, however, crypto exchanges do not fall under the Money Transmitter Act (MTA) and are not subject to transaction fees when transmissions are made through virtual currency kiosks, ATMs and vending machines, since “Virtual currency, including Bitcoin, is not considered “money” under the MTA”.

Further progress in regulation was made this week as the stock and crypto trading app Robinhood received BitLicense by the New York State Department of Financial Services. With talks of an IPO and the new ability to trade BTC, ETH, BCH, and LTC, Robinhood has amassed a valuation of $5.6 billion.

9. Researchers from top universities improve scalability and efficiency

After the launch of Unit-e, a globally scalable decentralized payments network, in partnership with other top research universities, MIT researchers continue redefining cryptocurrency boundaries. MITNews’ latest release details Vault, the currency that requires transaction-verifying nodes to store 99% less data than BTC. Professor Silvio Micali of MIT Engineering believes his PoS blockchain Algorand where Vault is based out of is the next step toward a borderless economy.

In addition, research strides continue as The Tsinghua University, one of the top 9 universities in China, has partnered with Ripple in order to promote blockchain research. The Institute for Fintech Research at the university will bring together top graduate students throughout the country to study global blockchain regulations and further develop the industry.

10. Blockchain popularity grows with clothing, finance, and health insurance industries

A major week for the adoption of blockchain as Harvard University and Levi Strauss Co. implement blockchain for factory safety. The system provided by ConsenSys will replace external factory health and safety auditors in efforts to produce meaningful supply chain solutions. Startup, Eligma’s Elipay app based in Solvenia is now an accepted payment method in over 240 locations and works with Eligama’s coin Eli, and others like BTC, ETH, and BCH. In the financial industry, the Singaporean branch of the UK-based banking and financial services firm Standard Chartered, just completed its first blockchain-powered trade finance deal in under a day.

Health Insurance mega Aetna has powered with IBM for a blockchain network in order to streamline claims processing and payments. The partnership is strengthened by the addition of additional health insurers, Anthem Inc. and Health Care Service Corp., as insurers and other industry professionals look to securing and streamlining the healthcare industry.

11. Layoffs followed by new investments at ConsenSys

ConsenSys claims layoffs affected support and technical staff but were a part of the natural evolution of the company. Although the bear market has many reevaluating the industry, ConsenSys believes the company and the crypto industry are healthy and continue to see growth.

Despite the layoffs alongside last week’s investment in Newspack, a publishing platform with blockchain-native plugin, ConsenSys shared a press release detailing a collaborative project with New America, Levi Strauss & Co. and Harvard T.H Chan School of Public Health in order to combine blockchain with the health and well-being of factory workers. The $800K grant that made the collaboration possible was provided by the U.S. State Department.

12. Telegram messaging app to release blockchain platform

The popular messenger app Telegram is planning to release a blockchain called Telegram Open Network (TON). The company held two ICOs in 2018 which raised almost $1.B in total for this project, which may be coming out by March 2019, although this date is merely tentative. Telegram’s CEO, Pavel Durov, told Russian media that TON is “90% ready.” The TON platform is designed to be an added channel for exchanging data, and will be powered by the native token “Gram.”

Telegram is especially popular in the crypto world, and counts with over 200M active users – 10M of which reside in Russia, where Durov is from, and where the app is banned since April 2018, when Durov refused to share the app’s encryption keys with Russian authorities.

This week seems more interesting for what it augurs than for what it has brought: it will be interesting to see if any movements are spotted in the markets next week in reaction to the new bear market record. The crypto community also awaits further resolution for the Ripple controversy. Will XRP lose it’s second place or will the Messari report not make a dent at all?

We wish you a great week,

Coin360 Editorial Team