Weekly Roundup: Negative ETF Decision Fails to Rain on BTC’s Parade
In this week’s edition, we lament the SEC’s continued bull-headedness in their inability to recognize bitcoin as an actual, tradable commodity (when most of us know it already is), celebrate how their decision against the approval of a bitcoin ETF hasn’t stopped bitcoin’s July bull run, and provide you with the names of a couple of coins that are managing to do spectacularly in what is still definitively a bear market for most altcoins.
BTC Ends July with 30% Gain, Bulls Rejoice
Despite some rough and tumble moments amidst an atmosphere of high volatility, bitcoin ended up over 6% for the week, with the month of July closing in on a rather unexpected 30% gain in price. All in all, July was good to bitcoin, despite earlier predictions that prices would remain in the doldrums until big-time investors and trading firms returned to their work desks after their summer vacations. Unlike as seen in traditional markets, the adage “Sell in May and go away” isn’t necessarily true when applied to cryptocurrency markets (or at least with bitcoin; the top 50 altcoins posted an average 8.5% loss against bitcoin during the last week of July).
Bitcoin ETF Application Rejected, Markets Rebound Quickly
The famed Winklevoss twins had their bid for the formation of a Bitcoin ETF rejected for the second time in 17 months, causing the price of BTC to quickly recede 6%+ in the immediate aftermath, only to regain most of its losses less than 24 hours later. Bitcoin’s quick rebound proved that recent market gains had not been due solely to anticipation of the SEC’s decision, and that there might be something more behind this recent bull rally. As mentioned in previous editions of the Weekly Roundup, an ETF, or Exchange Traded Fund, is basically a stock market symbol that represents indirect ownership in bitcoin – or at least its future welfare. Instead of being backed by the assets and performance of a company or corporation, ETFs are backed by commodities and driven by the trading activity of the commodity. If a bitcoin trading vehicle were ever listed on the likes of a leading stock exchange such as NASDAQ, it would open up bitcoin trading to a whole new category of investors and almost assuredly spark an increase in the price of BTC.
Interestingly, SEC commissioner Hester Peirce publicly disagreed with the vote of the commission following its decision, tweeting the following in a rare moment of discord:
Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent: https://t.co/gH5zXaKtmj
— Hester Peirce (@HesterPeirce) July 26, 2018
Among the reasons given by the SEC as to why the Winklevoss’ Gemini Exchange was unready to handle the responsibility of managing a bitcoin ETF was their opinion that it did not have measures in place to effectively prevent market manipulation or insider trading of bitcoin. In a statement published on the SEC’s website, commissioner Peirce outlined her arguments as to why the implementation of a Bitcoin ETF would act as a stabilizing force and be genuinely positive for all categories of bitcoin investors:
… I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order. More generally, the Commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of bitcoin (ETFs). – Hester Peirce
The battle for a Bitcoin ETF remains far from over as several other applications remain lined up to square off against the SEC in a fight for recognition and legitimization. Expert opinions of their success and impact on bitcoin remain varied far and wide, from ushering in a drastic price increase to never happening at all. Regardless, continued positive price movement remains, perhaps signifying that the sum of trader wisdom is projecting an eventual, albeit untimed, happy ending to the Bitcoin ETF story.
Coins Bucking the Trend
Though July was kind to bitcoin, most other coins can’t say the same, with only 5 out of the top 50 posting gains against BTC in the past week. In an index we developed called the “Goodness Index,” 2 coins in the top 50 were identified as bonafide movers and shakers bucking the trend of a bearish altcoin market. The Goodness Index (GI) is comprised of 2 coin metrics:
- 24-hour coin volume divided by coin market cap (Vol/Mkt Cap, % total value of coins traded, reflects relative amount of coin trading activity),
- 7-day coin gain/loss minus bitcoin’s 7-day gain/loss (in terms of %, reflects relative gain/loss compared to bitcoin).
The formula for the index is thus as follows: GI = (A / BitcoinA) x B x 100. The point of creating the formula in this manner was to identify which coins had a high amount of recent volume and week-long gains versus bitcoin. For example, if a coin had a loss against bitcoin, its GI would always be negative, regardless of its volume. If a coin had a gain against bitcoin but low trading volume, its GI would be small, but positive. If a coin had a big gain against bitcoin and high trading volume, the GI would be a high, positive number – and these are the coins we’re looking for.
Since last week was bad for most alts, the average Goodness Index was -7.88. With a standard deviation of 22.57, that means that coins with a GI score greater than 14.69 are statistically interesting and out of the norm, of which there were 2 of for last week (it should be noted that Bitcoin and Tether were removed from the top 50 when compiling averages). Let’s take a closer look at them now:
#1. Mithril (MITH): GI = 93.53
Only hitting the markets in late March of this year, Mithril is a huge up-and-comer, taking less than a month to develop a market cap of over $300 million. Mithril is an Ethereum token designed to reward social media posters for posting popular content. Its website describes it as “a decentralized social media platform that rewards all content creators.” Under this premise, they believe that not only the largest and most powerful content creators should be rewarded for their social media contributions and that everybody should have a chance for monetization of their content. Right now, their distribution is limited only to the Lit social media platform, but they have plans to expand their reach to all other platforms, new and old.
So how is Mithril up almost 10% against BTC over the last week, on extraordinarily high trading volume? Their decentralized social media platform Lit is managing to catch on extremely quickly, attracting users hoping to escape the likes of Facebook where data can unwitting be sold and accessed by 3rd parties for perhaps nefarious reasons. They are also attracting content creators fleeing YouTube who feel alienated by their new, restrictive monetization policies which basically render the vast majority of all channel owners ineligible for ad revenue. Combined with an active PR team that is looking to expand Mithril’s reaches to huge social media markets like Korea and Japan is a thriving user community that is also seeking to add new members to Lit so that their own content can generate more MITH tokens for themselves.
We want to express our heartfelt thanks to the voters that support us for the Binance Community Coin of the Month election. We are honored and humbled that you have placed your trust in Mithril. We will not disappoint you.#oneteamonedream #mithril #socialmining #thankyou @binance pic.twitter.com/k0ZgLKSmak
— Mithril (@MithrilToken) July 30, 2018
What also doesn’t hurt is that MITH is currently leading the competition in Binance’s current round of voting for which coin they should add to their exchange next. The “Binance Bump” has never hurt anybody to be listed on the world’s biggest cryptocurrency exchange. In conclusion, its quite possible that Mithril and Lit are at the forefront of a new wave of social media platforms that are decentralized and profitable for its users, and if this is the case, expect the tremendous success of MITH to continue well into the foreseeable future.
#2 Zcash (ZEC): GI = 18.49
Though not nearly as exciting as Mithril’s advances, the anonymity-driven coin Zcash is firmly holding the #2 spot, up over 10% in the last 7 days on pretty substantial volume. One of the older coins on the market that is still enjoying a tremendous degree of success, Zcash describes itself as “the first open, permissionless cryptocurrency that can fully protect the privacy of transactions using zero-knowledge cryptography.” Zcash is different from the clear majority of altcoins in that it not only offers a proven, unhackable way to remain anonymous during transfer, but it also enjoys real-world utility as a choice of currency, even if mainly only on the dark markets.
So why is Zcash continuing to fare well in a decidedly bear market for altcoins? For one, the coin received some pretty praising media coverage – by none other than stock exchange giant NASDAQ – who hailed the coin as “the king of crypto privacy.” As NASDAQ publications are read by serious-minded investors worldwide, a few of them probably decided to jump on board the ZEC ship, helping to bolster its price. In addition was an announcement by crypto security and storage company BitGo that the company was about to include Zcash in its wallet services, meaning Zcash holders could use BitGo to perform complicated multi-signature transactions and use its cold storage services, both of which are considered to be among the best in the industry. These two events, which add a certifiable degree of credibility to the coin, help Zcash’s case for being the go-to privacy coin out of about 8 serious competitors to choose from.
In case you were curious, the worst performing coins for last week out of the top 50 – according to the Goodness Index – were Bytom (BTM, down 7.7% against bitcoin on heavy volume, GI = -53.54), Augur (REP, down 22.6% against bitcoin, GI = -68.02), and Qtum (QTUM, down 11% against bitcoin on heavy volume, GI = -81.59).
In Case You Missed It: Expanded DApps Section Now on Coin Clarity
In the past few weeks, we here at Coin Clarity have significantly updated our DApps section to provide you with a comprehensive list of DApps (decentralized applications) for multiple coin platforms. If you are still unfamiliar, these new types of programs (whether desktop or mobile-based) allows for the seamless connection of a cryptocurrency blockchain with an application to provide a range of customized crypto-based services.
From advanced wallet and trading services, to entertainment, to business management (to much, much more), DApps are becoming the wave of the crypto future, as they find more and more ways to integrate cryptocurrency with mainstream internet services. In our new DApps layout, you can browse DApps by coin platform, service category or tag, so feel free to check it out to see how DApps can improve your crypto/internet experience.
Also in the News
- A recent Gallup poll found that while over 25% of American investors (defined as having more than $10,000 currently tied up in investments) are intrigued by bitcoin, only 2% of them are actually invested in bitcoin, or would even consider it. Going by the results of this poll, it would seem that the investor community is pretty polarized over bitcoin, with less than half of one percent of responding investors saying they would consider changing their mind about investing in bitcoin in the future.
- Inspired by the apparent (though unverified) “success” of the Venezuelan government’s launch of the petro – the first state-backed and run cryptocurrency – the government of Iran is now looking into launching its own state-backed coin. The move comes on the heels of imminent U.S. sanctions that are set to begin in August.
- Perhaps in an effort to quell customer fears that they were preparing to perform a massive exit scam, or perhaps due to bitcoin’s sudden uptick in price, long-standing cloud mining service Hashflare announced that it would resume its pre-existing mining contracts per the terms stated in its user agreement. Whether Hashflare’s unexpected move is due to legitimate business decision-making or because of the immediate backlash they encountered after the announcement of their closure and termination of mining contracts last week, the reputation of cloud mining services has taken a number of hits since the inception of its idea, With most customers failing to ever receive a positive ROI even in the best of circumstances, it is likely that the association of the word “scam” with the cloud mining industry is now too great to ever be completely shaken off.