Crypto Market Observations: Crypto Winter Continues Through November 2018
December 7, 2018 | Blog

Crypto Market Observations: Crypto Winter Continues Through November 2018

SharesPost Token Index down 71 percent since inception, yet “less worse’ than ETH

The downward trend in the overall crypto market has continued through November. The bitcoin cash fork event during mid-November and the beginning of a regulatory crackdown on Initial Coin Offerings (ICOs) appear to have sparked the high volatility and negative sentiment amongst crypto investors. The SharesPost Token Index which tracks the top 15 tokens by marketcap and has decreased from 57.51 to 28.52, a 50.4 percent decline, during the month of November 2018. This dive compares to the moderate, 2.5 percent, gain seen during the month of October. Benchmarking the Index to popular cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) paints a similar story to the large value cut for the month. The Index underperformed both by roughly 13 and 7 percent respectively.

Overall, since inception, the Index has outperformed ETH but underperformed BTC. The Index has decreased 71.5 percent while ETH is down 75 percent and BTC down 36.75 percent since July 1, 2018. Holochain (HOT) is the only token that had a positive growth, of 25 percent, during this period.

November Constituents Performance
November Constituents Performance
Source: SharesPost Research; CoinMarketCap; Data as of November 30, 2018
Top Performers

During November, every index constituent declined more than 20 percent. While the overall market has been on a downward trend, the index constituents that declined the lowest amount during the month of November were BAT, PPT, and REP in rank order. Basic Attention Token (BAT) enjoyed some (relative) price support since listing on Coinbase in mid-October. Zilliqa is on track to launch its Mainnet in Jan 2019 and OmiseGo has completed its first plasma iteration, designed to increase transaction speeds on the Ethereum blockchain. Binance on the other hand has been on an investing spree. The cyrptoexchnage has invested over $2.5 million in an Australian travel company and over $3 million in a US crypto trading desk.

Bottom Performers

The worst performing index constituents during the month were WTC, LRC, and NPXS. Each of the tokens shed more than half their value over the course of the month. Waltonchain (WTC) likely saw the greatest drop during the month given the lack of information the project makes available for developers– the project doesn’t have a GitHub community.

Source: SharesPost Research; CoinMarketCap; Data as of November 30, 2018

Source: SharesPost Research; CoinMarketCap
Market Commentary – BCH Hard Fork and SEC Chair’s Remaining Doubts

Bitcoin Cash (BCH) had a hard fork, or a deviation in protocol, resulting in two versions of BCH: BCHABC and BCHSV. Interestingly enough, BCH itself came about from a hard fork from BTC in 2017. In the end, Bitcoin Cash ABC (Adjustable Block Cap) took the title as the new Bitcoin Cash while Bitcoin Cash SV (Satoshi Vision) is seeking to emerge as a new token and is changing its name to Bitcoin SV. Craig Wright, the self-proclaimed Bitcoin inventor, claims that Bitcoin SV is more in line with the original intent of Bitcoin.

As mentioned, the hard fork preceded a major slump in digital asset market cap. The aggregate value of cryptocurrencies dropped to around $130 billion by the end of the month. This figure compares to the market high earlier this year of over $800 billion.

Despite the major price volatility, November was not entirely negative. Specifically, SEC Chairman, Jay Clayton, hinted to future approval of a digital asset ETF. During the Consensus Invest Conference, he outlined his remaining doubts in the ETF asset category. Among those reservations he targeted the lack of proper marketplace surveillance and the dearth of a gold-standard in custody. Generally, the Chairman wants surety that crypto markets cannot be manipulated and that investors won’t have their digital asset investments easily stolen. As Clayton said, “those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade.’

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Analyst compensation is based upon various factors, including the overall performance of SharesPost Inc. and its subsidiaries and the performance and productivity of such analyst, including (1) feedback from clients of the SharesPost Financial Corporation and other stakeholders in our ecosystem, (2) the quality of such analyst’s research, and (3) the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost Inc., including brokerage sales.

DISCLAIMER: This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks. You should complete your own independent due diligence regarding the investment, including obtaining additional company information, opinions, financial projections, and legal or other investment advice.

Investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, SharesPost Investment Management, the SharesPost 100 Fund, and the SharesPost 100 List are all registered trademarks of SharesPost Inc. All other trademarks are the property of their respective owners.

Copyright © SharesPost, Inc. 2019. All rights reserved.

Rohit Kulkarni

Rohit Kulkarni

Rohit is the Managing Director, Private Investment Research for SharesPost Research LLC. Prior to joining SharesPost, Rohit was a Vice President, Senior Analyst at RBC Capital Markets.
Please Read These Important Legal Notices and Disclosures

CONFLICTS: This report is being published by SharesPost Research LLC and distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation, and SP Investments Management LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost Inc. SP Investments Management is the investment manager of the SharesPost 100 Fund, a registered investment company, and other funds.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction. This report does not constitute an offer to provide investment advice or services. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability of a particular investment or transaction, (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Information regarding companies in the SharesPost 100 List available on the website has been collected from or generated from publicly available sources. The availability of company information does not indicate that these companies have endorsed, supported, or otherwise participated with SharesPost. Company “thesis” is the opinion of SharesPost and is not a recommendation to buy, sell, or hold any security of such company.

Investors should be aware that, at any given point in time, the SharesPost 100 Fund (the “Fund”) may or may not have an ownership interest in any of the issuers discussed in the report. Accordingly, investors should not rely on the content of this report when deciding whether to buy, hold, or sell interests in the Fund. Instead, investors are encouraged to do their own independent research. Before investing in the Fund, investors are cautioned to carefully consider the investment objectives, risks, charges, and expenses before investing. For a prospectus containing more information about the Fund, please visit www.sharespost100fund.com. Read the prospectus carefully before investing.

ANALYST CERTIFICATION: The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers and that no part of such analyst compensation was, is, or will be, directly or indirectly related to the specific views contained in this report.

Analyst compensation is based upon various factors, including the overall performance of SharesPost Inc. and its subsidiaries and the performance and productivity of such analyst, including (1) feedback from clients of the SharesPost Financial Corporation and other stakeholders in our ecosystem, (2) the quality of such analyst’s research, and (3) the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost Inc., including brokerage sales.

DISCLAIMER: This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks. You should complete your own independent due diligence regarding the investment, including obtaining additional company information, opinions, financial projections, and legal or other investment advice.

Investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, SharesPost Investment Management, the SharesPost 100 Fund, and the SharesPost 100 List are all registered trademarks of SharesPost Inc. All other trademarks are the property of their respective owners.

Copyright © SharesPost, Inc. 2019. All rights reserved.