Blog Article | Rohit Kulkarni
Posted: November 7, 2018

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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Rohit Kulkarni
Article Author

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.

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PLEASE READ THESE IMPORTANT LEGAL NOTICES AND DISCLOSURES

This blog post is being published by SharesPost Financial Corporation, member FINRA/SIPC. 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, LLC is the investment manager of the SharesPost 100 Fund, a Registered Investment Company, and other funds. These entities and funds (hereafter “SharesPost”) does, seeks to do business with and owns the companies covered in this research report. Consequently, investors should be aware that SharesPost has a conflict of interest that could affect the objectivity of this report.

None of the information contained in this blog post 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 does it 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.

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 such company has endorsed, supports or otherwise participates with SharesPost. Company “thesis” are the opinions of SharesPost and are not recommendations to buy, sell or hold any security of such company.

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