Reflecting the general valuation appreciation in crypto markets this year, the SharesPost Token Index has more than doubled in 2019, rising 141 percent from January 1 through April 30. The Index reached the highest level since August 2018 on April 20, at a value of 74.89 and later settled at 66.66, marking a welcomed 16.5 percent gain over the month. Index benchmarks, Bitcoin (BTC) and Ethereum (ETH), also experienced appreciated monthly gains at 29 percent and 16 percent respectively.
Basic Attention Token (BAT) was the strongest performing Index constituent over the month of April, followed closely by Augur (REP). Speculation likely drove both of the April “winners.” BAT recently partnered with the Brave Browser to better reward browser users for their online advertisement engagement in pursuit of further optimizing the web-based ad ecosystem. Augur announced in April that they would be upgrading their REP token from the ERC-20 protocol to ERC-777, likely driving interest in the token. We must note the latter protocol is still in the development phase with blockchain developers contemplating the specifics.
Ziliqua (ZIL) and 0x (ZRX) tied for the worst performing index constituent over the course of April. Both tokens saw a valuation decrease of about 16 percent. LINK, OMG, and AE all had double digit drops during the month. Crypto market participants are likely unsurprised by this volatility. By historical standards, the aforementioned decreases are more modest than those seen in November 2018, where ZIL, ZRX, OMG, and AE all lost nearly half their value in a month’s time. Perhaps crypto markets are rebounding out of the Crypto Winter of 2018.
Towards the end of April, Bloomberg reported that Fidelity will be expanding its Bitcoin trading capabilities, targeting institutional clients before rolling it out to retail accounts. If this development is well accepted by big-account clients, crypto could be on its way towards a higher collective valuation. From the many blockchain conferences and meetups SharesPost Research has attended in the last year, general sentiment has focused on the size of this asset class as being the most impeding factor. Institutional investors are concerned with liquidity risk and a larger pool could help mitigate this concern. We will continue to monitor regulatory and institutional catalysts in this fast-moving industry.
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