In this week’s edition, we examine how much of an effect the SEC can actually have on bitcoin prices, let you know the next SEC date to keep in mind, discuss bitcoin’s increase in total market cap dominance, and talk about how one white hat hacker’s anonymous good deed could help to heal the rift between Bitcoin Core and Bitcoin Cash communities. We also discuss how platform coin Waves managed to rise above last week’s red, and review a few of the quirkier stories to come out of last week’s blockchain-related news pile.

Bitcoin ETF Decision Delay Panics Traders

On the heels of news of the SEC’s decision to postpone their decision regarding approval for the most recent Bitcoin ETF application, the price of BTC made a dramatic slide downward, losing almost a thousand dollars over the course of 24 hours. The decision has been officially pushed back until September 30th to allow the federal oversight committee time to digest the pros and cons of officially declaring bitcoin to be a security. Per usual, bitcoin’s fall dragged the rest of the coin market with it, wiping out as much as much as $43 billion from the total market cap across a 5 day period. Crypto investor fear reared its ugly head as it became apparent that 2018’s bear market run was not yet finished. As of early Monday morning, bitcoin was down about 7% for the week, though still up 3.5% over the last 30 days.

Bitcoin’s slide has been ongoing since the beginning of the month. Source: coinmarketcap.com

 

The SEC is becoming notorious among crypto investors who have been anxiously awaiting their stamp of approval for a Bitcoin ETF. Such an approval is predicted to be a catalyst for a tremendous rise in the price of BTC, assuredly bringing along many altcoins for the ride. Not only would a Bitcoin ETF open up its ability to be traded by Wall Street and small-time stock traders alike, it would also act as a stamp of approval by the U.S. government, giving bitcoin an air of legitimacy that some investors feel is sorely needed. Ironically, such a decision would also take away from bitcoin’s ability to truly operate free from government oversight, moving it away from Satoshi Nakamoto’s libertarian ideals and towards institutionalization. For the time being, bitcoin remains independent from government recognition as a security, with a SEC decision price bump out of the picture until late September.

Altcoins Down, Bitcoin Dominance Up

Among the top altcoins hurt the most by last week’s crypto bloodbath were Ripple (XRP) – down 28%, EOS (EOS) – down 26%, IOTA (MIOTA) – down 39% and NEO (NEO) – down 30%. These 4 coins alone account for over $6 billion of the $43 billion lost during last week’s freefall, out of a list of over 1500 cryptocurrencies to suffer negative price movements. The total market capitalization value of all coins is now at a paltry $217 billion – a level not seen since November of last year, when bitcoin started its massive climb upward to almost $20,000.

Also interesting from a technical perspective is the fact that bitcoin’s percentage of dominance of the total coin market capitalization has now surpassed 50% for the first time since December, meaning that BTC is once again worth more than all other cryptocurrencies combined. Besides being the first cryptocurrency, bitcoin is also known as the least risky of all coins. A decreasing bitcoin dominance can be inferred to mean that crypto investor appetite for risk is increasing. Conversely, an increasing BTC dominance (as has been the case for most of 2018) means that investor appetite for risk is decreasing.

The rise and fall – and rise – of BTC’s dominance of the market cap space. Source: coinmarketcap.com

 

In addition, bitcoin’s recapture of total market cap dominance also signifies that demand for altcoins and ICO-related products that were all the rage in 2017 has slowed tremendously. Hundreds of new coins that sprang out of the woodwork in the last 2 years have come and gone, but bitcoin has remained, and even improved, thanks to adaptations like the implementation of SegWit and the Lightning Network. Bitcoin has proven that it can self-evolve in order to meet scaling requirements for continued growth, finding ways to reduce transaction fees and increase transaction capacity, which lessens the value of the selling points of its many competitors. Bitcoin forks like Bitcoin Cash (BCH), Bitcoin Gold (BTG), Bitcoin Diamond (BCD) and Bitcoin Private (BTCP) – all developed under the premise of making improvements upon bitcoin’s design – are finding themselves outmoded because of bitcoin’s evolutionary ability to incorporate their best features into itself.

Bitcoin Core Developer Comes to the Rescue of Bitcoin Cash

In a rare display of non-partisanship, a bitcoin developer who works for the Digital Currency Initiative at the MIT Media Lab revealed himself as the party responsible for disclosing a potentially damaging bug in the code of Bitcoin Cash. Back in April, the Bitcoin Core client for Bitcoin Cash (otherwise known as “Bitcoin ABC”), though largely overlapping in code with Bitcoin Core, was found to have a dangerous vulnerability that could potentially be used to split the Bitcoin Cash network into 2 equally-sized, non-compatible chains. It was immediately patched, and the bug was never exploited. The developer chose to remain anonymous at the time, fearing that if the vulnerability was used, he would be the one to blame, potentially causing the downfall of a multi-billion dollar cryptocurrency.

The move is being hailed as largely altruistic, as developers of Bitcoin Cash have long been known to accuse developers of Bitcoin Core of working on an inferior product. The feud between the “two bitcoins” took a turn for the serious when a lawsuit was filed against Roger Ver, owner of the bitcoin.com domain, in April 2018. The lawsuit alleges that Ver was using his influence to promote Bitcoin Cash by advertising it for sale as “the real bitcoin,” manipulating visitors into thinking they were buying BTC when they were actually purchasing BCH. Ver, an extremely verbal critic of the original bitcoin (or “Core” as it is called by Bitcoin Cash evangelists) since the BCH fork last year, is accused of going so far as to even re-direct links to a BTC block explorer to a BCH block explorer.

Coins Bucking the Trend

Amidst a sea of red numbers, it is unsurprising that most coins did terribly last week compared to bitcoin, however there were a couple of certifiable winners that managed to rise above it all. Using our in-house developed metric, known as the Goodness Index, we managed to find one coin that fared significantly well compared to bitcoin and most others.

As a quick reminder, the Goodness Index (GI) considers 2 main factors and compares them to bitcoin: price and volume. Coins that are up against bitcoin on heavy trading volume receive high GI scores, and coins that are down on heavy volume receive low scores. This week, the average GI score for the top 100 alts (excluding BTC and USDT) was an abysmal -10.9, compared to last week’s 1.81. That means that compared to bitcoin, most coins did pretty horribly – something we were already aware of. But what was the clear-cut winner for last week? We’ll review it now and discover what makes it tick.

LogoWaves (WAVES) (GI = 32.8)

A multiwallet coin platform that brings “push of a button” ease to token creation, Waves has been around for a few years already and is something of a veteran compared to most other coins. With a built-in exchange, crypto-to-fiat gateway and pleasant, easy-to-use graphical interface, Waves makes cryptocurrency accessible for those with little-to-no technical knowledge. Tokens can be created on the platform for a very cheap fee, and its transactions are cheaper than most other coins with its features. In addition to storing WAVES, its wallet can be used to store bitcoin, Ethereum, Ethereum Classic, Zcash and a variety of other popular cryptocurrencies. It can even store fiat currencies which can be used on the platform’s decentralized exchange or withdrawn to participating financial service providers.

So what helped buoy Waves up above the red, steering it into a 15%+ gain for the week? For one, Waves is considered to be largely oversold. With a market cap of $212 million, it is but a fragment of its former self, valued at over $1.6 billion in December 2017. While 2018 has been a crushing year for most alts, it has been particularly crushing for Waves, and perhaps undeservingly so. Waves is a stable, decentralized platform and ties together a lot of the best elements of cryptocurrency yet has been largely overlooked by investors in recent months.

Definitely helping to attract attention to what might be a “diamond in the rough”-type scenario, Waves CEO Sasha Ivanov was recently the subject of an interview with Forbes magazine, perhaps helping it spike while everything else has been going down, down, down. Murmurings of new developments in the works for the project have also been abound in the coin’s community, which has been in desperate need of a spark of hope for quite some time. While an interview with Forbes certainly helps, it will take a lot more for the coin to come anywhere near its former glory.

Also in the News

  • The story of Bitconnect, the world’s largest crypto Ponzi scheme which cost thousands of people millions of dollars, manages to become more interesting all the time. It turns out that a politician in India may have misguided several officials into investing state funds into the Bitconnect scheme, as much as $3 billion dollars. The story involves kidnapping, ransom, extortion and what doesn’t help is that it occurred in the home state of the ruling party, who just saw their chances of re-election plummet significantly because of the blunder.
  • Citing a “conflict of interest,” Facebook’s cryptocurrency head left their position on the board of Coinbase, confirming long-standing speculation that Facebook had something blockchain-related in the works. Perhaps due to massive PR problems the social media giant has had regarding user data privacy over the last couple years, it is looking for a blockchain solution to data management. Although official word has yet to be released about the details, when it is chances are it will be more than just about a “Facebook Coin.”
  • Drones on the blockchain? You bet. A Russian startup company called SKYFchain is seeking to employ the use of heavy-duty drones to deliver goods to places considered untravellable during certain parts of the year, using a blockchain to keep record of delivery locations and shipping logistics. The drones will be able to fly a range of 200 miles, carry several hundred pounds, and be able to operate under severe weather. Funds for the startup are currently being raised via an ongoing token sale, which has already raised over $6.2 million. Why choose to track autonomous vehicles using an autonomous ledger? Because it’s 2018, it’s cool, and you can.