SharesPost Token Index Outperforms ETH & BTC In October
November 7, 2018 | Blog

SharesPost Token Index Outperforms ETH & BTC In October

Bonus: Observations On The 10-Year Anniversary of Bitcoin

The SharesPost Token Index increased 2.5% from 55.23 to 56.62 during October 2018. This compares to 4%, 26%, and 20% declines in July, August, and September of 2018. By comparison, the popular cryptocurrencies, Bitcoin and Ethereum, shed 4% and 14% respectively during October.

For the first time since its inception in July 2018, the SharesPost Token Index outperformed these two leading cryptocurrencies. The Index’s performance was the result of key index constituents increasing their market caps following product launches and new partnerships.

Despite the gains of the month, the Index is still in the red since inception, down a total of 43% since July 1. This 43% decline in the Index compares to roughly flat results in BTC and 56% decline in BTC and ETH over the same period. The lagging performance is attributable to weakness in all but two coins in the Index. Individual coins that comprise the Index have experienced losses ranging from 27% to 60% since July 1.

In October, there was relatively low overall volatility for the SharesPost Token Index. Below we will visit the performance of some select constituents of the Index, as well as general observations from the crypto market at large.

October Constituents Performance
October Constituents Performance
Source: SP Research, CoinMarketCap; Data as of October 31, 2018
Top Three Performers

The top three performers the month of October were, in order, BAT, LRC, and ZRX. BAT enjoyed significant gains after the coin was listed on Coinbase on October 11. Another winner was ZRX, which was also listed on Coinbase Pro on the same day, October 11. LRC’s gains can be likely attributed to two factors: 1) Eight additional LRC coins were listed on LoopringDEX in October; 2) LRC decided to join #DeFi, a community of protocols and projects seeking to decentralize finance.

Bottom Three Performers

The three coins hit hardest in October were IOST, ZIL, and OMG. Zilliqa’s price was likely affected by news that the team is pushing back the launch date for the Project’s Mainnet. Despite the completion of a first plasma iteration “Tesuji Plasma” at the end of November, OMG coin has suffered from bad publicity attributed to “unfulfilled promises” and continuously missed deadlines. The losses of both OMG and IOST also correlate with the general losses in Ethereum over the month of October.

Source: SP Research, CoinMarketCap; Data as of October 31, 2018

Source: SP Research, CoinMarketCap
Market Commentary on Bitcoin’s 10 year anniversary

Bitcoin turned 10 years old on Oct 31, 2018. The most notable phenomenon we have seen recently is the dramatic decrease in BTC’s volatility. Since the inception of SharesPost’s Token Index, BTC has trended within a fairly narrow range. What’s even more interesting is that in October alone, trading in BTC occurred within deltas of +1%/-6%. After the mania at the end of 2017, crypto-critics said volatility was the single most limiting characteristic of cryptocurrencies. It reinforced their skepticism that cryptocurrency is nothing but a highly speculative investment. Because BTC is the market leader – and because the industry continues to mature – we expect volatility to decrease further.

Custody solutions contemplated by big financial institutions are another area we find very intriguing on the 10th anniversary of BTC. While still in the early days, and devoid of any real offerings yet, custody shows big promise. It is a potentially multi-trillion dollar play. We’re encouraged that Goldman Sachs is contemplating crypto custody solutions. We also view quite positively the crypto consortium announced by Nomura, JP Morgan, and Bank of New York Mellon. Clearly, Crypto is going to Wall Street, and these initiatives by traditional financial institutions are likely to be noteworthy in 2019 and beyond.

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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.

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 service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability 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 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 feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and 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, 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 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 and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other 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 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.

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 service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability 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 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 feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and 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, 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 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 and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other 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.