We’re closing in on the final moments of 2018. You’ll see this week’s market graphs look like a rollercoaster, but ended in an uplifting spike. Read on to learn about some massive industry players’ ups and downs this holiday season.
This was a turbulent week in crypto. In general, we saw a correction for last week’s upward trend. Monday 24th began with a high steam rally, after which came a sharp Christmas day slump. Most coins recovered mildly during the 26th and 27th, only to hit low again earlier today (28th). At time of writing, however, things are suddenly looking up again: most major coins are in green for the week (the exception is, predictably, BCH and BSV), and all major coins are in green for the day.
Hopes were that this week Bitcoin would reach the $5,000 mark necessary to sustain the bullish trend; so far we’ve been disappointed. On the 24th, BTC peaked at $4,270, but began to slide on Christmas day. Early on the 27th, BTC was still outperforming S&P 500 (which was slumping 19.8%) – Dow Jones and Nasdaq were also caught in a bearish trend this week. This advantage watered down, however, when the coin fell from $3,800 to $3,650 within the day. BTC did manage to recover once more, finally settling back down around $3,670 for most of today. At press time, however, BTC has spiked around $300 within just nine minutes (up 8%) – and this movement could spark a stronger rally. High volatility is expected within the $3,500 - $4,500 range. BTC is at $3,955 at press time (a 0.62% gain on the week).
As for the altcoins; EOS grew 8% on Christmas Eve, spiking at $3.07, likely as a consequence of China’s Global Public Blockchain Technology Assessment Index putting EOS top of the list. The coin slumped 20.5%, to $2.44 on Christmas day. Hovering at around $2.6 between the 26th and 27th, EOS fell to the week’s low at $2.30 earlier today, but has spiked to $2.7 for a 17.9% daily change.
Ethereum peaked at $157 during the Christmas Eve rally. It took a 26.7% dive down to it’s weekly low point today, 28th, at $115. Presently, ETH stands at $138, a 17.3% increase on the day, and a 22.9% gain on the week.
Ripple’s XRP peaked at $0.44 on the 24th, falling to $0.36 on the 25th’s downturn (an 18% loss), and hit the week’s low on the 28th with $0.34; a total 22% between the high and low. Currently XRP at a 4.6% 24 hour gain, valued at $0.38.
Finally, Tron. In the wake of last week’s big announcements (100M transactions reached), TRX peaked at $0.02 during the rally on the 24th. Both the 25th and the 28th saw TRX at around $0.018 (a 10% difference with the week’s high). Joining the sudden spike at press time, TRX is at a 5.72% week gain, at $0.021.
On the 23rd, TRON reported reaching one million user accounts. This coming just 6 months after their mainnet launch – 3 times faster than what it took Ethereum to reach the same milestone, as the team was quick to point out on social media. Earlier this week, CEO Justin Sun had gone as far as to predict that Ethereum would “slowly implode”.
Two notable comebacks in defense of TRON’s rival were that Ethereum was slower to reach one million addresses only because it began when crypto awareness was minimal, and that ETH’s $73 value, even after a 90% loss from its all-time high, still dwarfs TRX’s $0.02 price tag.
Of the 3,300 cryptocurrency offerings and ICOs analyzed by the Wall Street Journal, 513 of them were found likely to contain plagiarism, misrepresentations of the identities of project founders, or promises of unrealistic returns.
The study researched white papers from 3,300 projects launched between 2017 and 2018 and listed on ICOBench.com, Tokendata.io, and ICORating.com. Over 30 of the 513 are currently under scrutiny by regulators, and more than half no longer have a website.
Bithumb has been found not responsible for the financial damage caused to its customer Ahn Park, who alleges he lost $355,000 to a hack, a mere hours after he opened an account, on November 30th, 2017. Furthermore, Park claims Bithumb was giving hackers access to his account, according to the Korea Economic Daily.
The court sided with Bithumb, who claims they are not a financial company within the definition of the Electronic Financial Transactions Act, and therefore, cannot be held liable in the sense other financial institutions are. A judge added that cryptocurrency was “mainly used as speculative means, so it cannot be regarded as an electronic means of payment.” This sets a precedent that investors are not happy with.
This week, sources preached about the Dow Jones’s bear trend on Christmas day; about its largest single-day rally ever on the 26th (it gained over 1,000 points); and again about a new loss of 2% on the 27th. At the time of writing, the US stock market looks like it will extend its recovery.
However, the overall monthly report casts a better light on crypto than on other major asset classes. Stocks are having their worst December since the Great Depression, with the Dow down 9.4% and the S&P 500 down 9.8%. On the other hand, Bitcoin is having a December correction of almost 35.5%.
Rumors earlier this week that the Chinese mining giant Bitmain would belaying off nearly 50% of its workforce have become a reality. Bitmain fired its entire Copernicus team on Christmas Eve, with only a week’s notice. On Christmas day it was reported that a confirmed staff revealed the layoff would effectively involve more than 50% of the entire Bitmain workforce. An official report from Bitmain states this is all part of a minor adjustment made to keep the business sustainable in the current the market downturn. Crypto investor Kyle Samani warned on this will be “extremely bearish for BCH and LTC”.
Similarly, the Chinese exchange Huobi has announced it will also be firing employees as part of a restructuring plan. These two cases mirror the massive layoffs ConsenSys undertook earlier in December (the company fired 60% of their staff).
Stablecoins (blockchain-based currencies that are pegged to stable real-world assets) became popular among crypto investors in 2018 in response to the crash. Stablecoins are not attractive as speculative assets, but they are attractive tools when it comes to retaining the qualities of blockchain-enabled payment networks for remittance and hedging.
Thought many new stablecoins are transparent about their audit reports, Tether (the most popular stablecoin) is still refusing to be audited by an external party. 2019 might be the year stablecoins really take off; remember that last week Facebook announced plans to develop a stablecoin to power p2p payments on WhatsApp.
Bison App, owned by Börse Stuttgart (Germany’s second largest exchange, and Europe’s ninth), announced plans to launch a crypto exchange with support for BTC, XRP, ETH and LTC. This is a potential game changer for crypto trading in Europe. While the world’s fourth largest economy seems to be embracing crypto tighter than any other major global economy, Wall Street seems to be shying away from crypto, due partly to the 2018 crash and partly to an absence of a regulatory framework for them.
According to Bloomberg, established firms are “in a limbo” regarding their crypto efforts. Plans to make a business out of crypto have slowed down, but nobody has officially thrown the towel either. Eugene Ng, founder of the crypto hedge fund Circuit Capital, told Bloomberg “The bear market is going to allow many of these institutions to build the proper foundations without rushing to build-out infrastructure without adequate testing for fear of missing out on a gold rush.”
The New Indian Express reported on the 26th that a governmental committee in India suggested crypto may be legalized. This contrasts with news from March 2017, when a committee had recommended a complete ban on crypto.
The new committee includes members of the Ministry of Electronics and Information Technology, RBI, Securities and Exchange Board of India, and the revenue secretary. It was reportedly set up to deal with the conflicting opinions on the RBI’s ban. According to the local source, an official who attended the panel stated “There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders.”
Oasis Supermercados is leading the Brazilian blockchain integration by accepting Bitcoin, Bitcoin Cash, and Litecoin. Bitcoin enthusiasts Douglas and Thiago Andrade own and manage the supermarket chain, which has an annual revenue of $6.45 million USD. At the store, customers choose which currency they would like to use, scan a QR code, and the purchase is complete. The supermarket receives the money in fiat currency and later exchanged to the local currency, BRL, three days later.
Oasis Supermercados is joining Metro Brasilia (the subway system), Tecnisa (a construction company), and Noble Plaza Hotel, amongst a few other businesses, in accepting cryptos within Brazil.
Reachable Bitcoin nodes fell 19% in 2018. In theory, a lower number of reachable nodes can put the decentralized nature of the network at risk. Right now we are far from a 51% attack scenario; but the situation does merit attention. At the very least, this is a demonstration of how a continued bear market could, in the future, impact the bitcoin blockchain.
On the other hand, Bitcoin’s off-chain scaling solution, Lightning Network, is a testament to the health of the blockchain. The Lightning Network facilitated 496.8 BTC this year , an amount equivalent to over $2 million. The number of channels that are connecting nodes now totals 14,352 unique channels. In addition, Blockchain.com estimates (by removing likely change outputs) that over $410 billion was transacted via BTC in 2018, averaging over $13,000 per second.
Despite the lukewarm attitude that most businesses and government institutions have towards cryptocurrencies, 2018 saw some definite advances in terms of mainstream adoption. A survey conducted by Tata Communications revealed that corporate blockchain adoption is at 44%; a report by the crypto research company Clovr claims that 16% of remittances from the USA are done through blockchain;
While the process of adoption may come with hiccups, “decision makers are firmly focused on the positive impact of technology,” reported Tata.
The bear market claims five victims as 2018 closes out, with the death of BitConnect, FitCoin, Pincoin, Titanium, and LottoCoin. These casualties are mostly the outcome of initial coin offering schemes, deceptive social media frenzy, or flat out lies.
Titanium managed to extract $21 million USD from investors during initial coin offering while also emphasizing relationships with Walt Disney Company, Boeing, and PayPal. The ICO was shut down by the SEC’s new cyber unit, but Titanium had already managed to raise 57% of its goal in just three months.
As you can see, this was quite a turbulent week. Closing in on an equally active year, we wish you the best for the next one.
See you in 2019!