Thursday Checkup: Markets Tread Around Regulation Fears, Fall in Unison With BTC
Good Afternoon Cryptoheads and Happy Thursday to you. It’s that time of the week again where we check in with you, see how you’ve been doing, and give you the run down on some of the events that are currently responsible for rocking the cryptocurrency boat on its ever-turbulent journey through uncharted waters, and into the future. In this edition, we ponder the marked similarity in 7-day price graphs of the top altcoins, and in a new segment, review a few of the coins that are managing to do well against strong market headwinds.
Bitcoin Drops Below $8k for First Time Since February
The price of BTC dipped briefly into the sub-$8000 range on Wednesday as fears of regulatory hurdles internationally continued to seed doubt in the minds of crypto investors. Cryptocurrency was to be among the foremost of topics at a major economic summit in Argentina this weekend. All top 10 coins by market capitalization exhibited the nearly-exact same 7-day chart, which is best described as a sinusoid wave for the first few days, followed by an increasingly steep decline for the next few days, and capped with yesterday’s small upward bounce:
This week’s drop represents the first time bitcoin has sunk to the $7000s in over 5 weeks. A revamped, SegWit– and Lightning Network-friendly Bitcoin Network has helped speed up transaction confirmation times while simultaneously reducing their fees to a measly 20 satoshis per byte, or an average of $0.37 per transaction.
Despite these upgrades helping bitcoin achieve its current label as “stronger than ever,” they have done little to lessen the stampede of institutional-size investments moving out of the cryptocurrency market space. The two biggest indicators of investor enthusiasm remain the size of the total coin market cap (the market capitalization value of all coins put together) and the percentage of bitcoin dominance of the total market cap space. When the total market cap is on the rise, it signals rising investor confidence in cryptocurrency. Conversely, when the percentage of bitcoin dominance is on the rise, it signals a movement of investor money out of altcoins and into bitcoin and/or fiat currency.
Coins Bucking the Trend
Though a good 90% of the top 100 coins by market cap followed bitcoin’s price movement with an extremely high degree of correlation over the last week, a handful of them are exhibiting signs of independence, managing to rise above the red and into the green. The price of many successful altcoins remains intrinsically tied to the value of bitcoin, as bitcoin is usually the only gateway to cash from crypto. Some highly successful alts like Ethereum (ETH) and Bitcoin Cash (BCH) are also easily exchangeable for fiat cash, though their success in price is still largely dependent on the success of bitcoin, which remains the world’s foremost indicator of appetite for cryptocurrency investments.
In a new weekly segment, we delve into some coins which buck the trend and manage to climb upwards in a down market and offer some expert analysis on the underlying rationale behind their success. This week, we look at 3 coins in the top 25 by market cap that have 7-day price graphs which are markedly different from that of bitcoin, as well as 90% of all the top 100 coins. They are ranked according to their position on the top 100 list.
#10: NEM (XEM) (+20%)
During the writing of this article, the position of NEM (which stands for New Economy Movement) rose from the #12 spot to the #10 spot. At about 40 cents a coin, its current price remains just a fraction of its all-time high of $1.85, set in early January. Its relatively equal distribution at launch and novel take on the Proof of Work (PoW) blockchain system (which they call Proof of Importance, or PoI), as well as its token creation and ICO-hosting abilities, have garnered NEM massive success over the last two years.
So why is NEM doing so well this week in particular? Last week, owners of the hacked exchange Coincheck announced they would begin the process of refunding users with their lost NEM. On January 26, Coincheck was hacked and its hot wallet deprived by thieves of 526 million XEM, worth about $530 million at the time. On March 5th, the announcement was made that a blockchain forensics team had traced most of the heavily-laundered coins to a cryptocurrency exchange based in Vancouver, Canada. The newly-developed science of analyzing the blockchain for clues about the transfer of coins is predicted to help positively identify the hacking and perhaps even aid in the recovery of the lost coins by Coincheck.
#16: VeChain (VEN) (+20%)
Despite only being six months old and still without its own blockchain (it is currently only an Ethereum token), the Singapore-based VeChain achieved rockstar status in one of the fastest rises to a billion-dollar market capitalization of any cryptocurrency, ever. Its design was hypothesized in 2015 with the lofty goal of creating a standardized, blockchain-based system for logistics and shipping via the use of “smart tags.” According to the project’s roadmap, the VeChain blockchain is slated for release in the next three months (2018 Q2).
Why did VeChain crush it last week while most other coins floundered? The coin’s development team has been very active in the recruitment of potential clients and business partners on a global scale, attending international business technology conferences and boasting a Twitter following of over 82,000 users. On March 13th, VeChain held a largely successful “Ask Me Anything” (AMA) session on Medium where they announced plans to release an official whitepaper and provided updates on the launch of the VeChain “main net.”
#23: Binance Coin (BNB) (+10%)
BNB is another extremely successful Ethereum-based token, sold to investors during the Binance ICO process in 2017. Funds raised during the ICO were used to develop the Binance exchange platform, which has become one of the world’s most popular cryptocurrency exchanges by trading volume. Unlike most ERC-20 tokens, BNB has advanced functionalities that are native to the Binance exchange. Registered members can currently use BNB (purchasable via Binance) to offset trading fees by 50%, and the development team has future plans for more in-exchange uses of BNB.
So what caused the price of BNB to jump over 40% in under 3 hours earlier this week? On March 13th, the Binance team published a blog post on its homepage announcing they had completed development of a few projects long in the works, including “Binance Labs (a blockchain technology incubator), Binance Info (our Codex), as well as many other components that comprise the Binance ecosystem.” They also announced plans to use Binance Coin as the native token for an upcoming Decentralized Exchange (DEX), which are exchanges that rely completely on their programming to function, without any sort of human intervention. Though these types of exchanges are not designed to be profitable and usually are not without their own problems, Binance’s dedication to research and development in this field may be the helping hand that DEXs have needed for years to lift them out of the quagmire of non-reputability.