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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CONFLICTS

This report is 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.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own financial advisors before making any investment decisions. 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 service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

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

Analyst compensation is indirectly based upon the growth and success of SharesPost, Inc., including the overall performance of its subsidiaries, the individualized performance of any such analyst, and the development and progression of the overall research effort. SharesPost, Inc. earns revenue from, among other avenues, brokerage sales, and therefore the analyst may indirectly benefit from research reports that have the ultimate effect of increasing trading activity, either through SharesPost Financial Corporation and/or with SharesPost Investment Management, LLC.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.

Securities referenced in this report may be offered by SharesPost Financial Corporation, member 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, involving a high degree of risk, and investors should 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 and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, 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, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.

Alejandro Ortiz

Alejandro Ortiz

Alejandro is a Research Analyst, Private Investment Research for SharesPost Research LLC. Prior to joining SharesPost, he was a Valuation Analyst at Duff & Phelps with a focus on TMT industries.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

CONFLICTS

This report is 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.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own financial advisors before making any investment decisions. 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 service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

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

Analyst compensation is indirectly based upon the growth and success of SharesPost, Inc., including the overall performance of its subsidiaries, the individualized performance of any such analyst, and the development and progression of the overall research effort. SharesPost, Inc. earns revenue from, among other avenues, brokerage sales, and therefore the analyst may indirectly benefit from research reports that have the ultimate effect of increasing trading activity, either through SharesPost Financial Corporation and/or with SharesPost Investment Management, LLC.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.

Securities referenced in this report may be offered by SharesPost Financial Corporation, member 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, involving a high degree of risk, and investors should 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 and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, 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, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.