This report presents data on cryptocurrency and ICO market changes during 2018. Special emphasis has been placed on an analysis of the changes that have taken place during August 2018, including for the period of August 19-26, 2018.

Information as of August 27, 2018

Professor Dmitrii Kornilov, Doctor of Economics, Member of the Russian Academy of Natural Sciences, and Leading Analyst at ICOBox

Dima Zaitsev, PhD in Economics, Head of International Public Relations and Business Analytics Department Chief at ICOBox

Nick Evdokimov , Co-Founder of ICOBox

Mike Raitsyn , Co-Founder of ICOBox

Anar Babaev , Co-Founder of ICOBox

Daria Generalova, Co-Founder of ICOBox

Cryptocurrency Market Analysis (August 19-26, 2018)

1. General cryptocurrency and digital assets market analysis. Market trends

1.1. General cryptocurrency and digital assets market analysis

Table 1.1. Trends in capitalization of the cryptocurrency market and main cryptocurrencies from June 1, 2018, to August 26, 2018

Cryptocurrency market capitalization remained practically the same over the analyzed period (August 19-26, 2018) and as of 03:00 UTC equaled $217.5 billion (see Table 1.1). Over the same period, bitcoin dominance increased to 53.5%. The market dominance of the four and eight largest cryptocurrencies as of 03:00 UTC on August 26, 2018, equaled 76.8% and 83.5%, respectively (see Table 1.1).

The drop in cryptocurrency market capitalization compared to the start of the month equaled around $60 billion, including a drop in bitcoin capitalization by $17 billion and altcoin capitalization by $43 billion.

During the period from August 19-26, 2018, cryptocurrency market capitalization fluctuated from $202.9 billion (min) to $222.8 billion (max) (Fig. 1a), i.e. within a range of $20 billion. For its part, bitcoin capitalization fluctuated from $108.5 billion (min) to $117.4 billion (max), i.e. within a range of $9.5 billion.

Figure 1a. Cryptocurrency market capitalization since August 19, 2018

Figure 1b shows bitcoin capitalization (red line) superimposed on cryptocurrency market capitalization (blue line). The more intensive growth in bitcoin compared to overall market capitalization can be seen (see Table 1.1). As a result, over the week bitcoin dominance increased by 1.5%, from 52% to 53.5%, and since the beginning of May by 16.5%, from 36% to 52.5%.

Figure 1b. Capitalization of the cryptocurrency market (blue) and bitcoin (red) since August 19, 2018

A clear downward trend can be seen on August 23. Coinspeaker writes that China is blocking access to foreign cryptoexchanges, with cointelegraph adding that the country is also blocking accounts with news about blockchain and cryptocurrencies. CNBC also announced that the SEC had rejected nine applications to open bitcoin ETFs. All of these news items were published on August 23, resulting in a market plunge of $20 billion over a twenty-four hour period (see the news in Tables 1.3, 1.4).

The rise and fall of cryptocurrency prices over the past seven days (August 19-26, 2018)

Last week’s leaders from among the top 500 cryptocurrencies by capitalization, which showed an appreciation of more than 100%, were the projects WABnetwork (+169.93%), B2BX (+169.19%) and Digitex Futures (+136.96%). The growth of Nano (+90.78%), which has been delighting its backers for two weeks in a row now (Nano’s growth the week before last was +38.28%), should also be noted. Its trading volumes are growing, and with them its price, due in large part to positive news items such as the upgrade of the Nano Node software (https://twitter.com/nano/status/1032362217172295680), and Andy Woolmer joining the Nano team (https://twitter.com/nano/status/1031972442514882560).

During the week the following coins with fairly significant trading volumes showed an increase in price by more than 50%: Experience Points (+84.12%), Byteball Bytes (+70.56%), Dent (+57.18%), Substratum (+56.36%), and DADI (+52.60%).

During the period from August 19-26, 2018, the change in the prices of cryptocurrencies in the top 500 ranged from -54% (Paypex) to +167% (WABnetwork). The Paypex price experienced the largest fall for the second week in a row (the fall in price the week before last equaled -50%).

In addition to the Paypex price falling faster than all other coins over the week, its 24-hour trading volumes are also dropping inexorably. All of this might signal the demise of the project. For example, the last entry on the project’s official Twitter account was made on August 14. Meanwhile, WABNetwork is growing fast on the back of news on its listing this week on two cryptoexchanges (https://twitter.com/WABnetwork/status/1031471154685337601)

The price of 229 cryptocurrencies and digital assets from the top 500 showed growth, including 47 from the top 100.
Some of the most stable cryptocurrencies are those whose price is tied to the US dollar such as Tether (Bitcoin, Ethereum blockchains), TrueUSD (Ethereum blockchain), bitUSD (BitShares blockchain), and Dai (Ethereum blockchain), as well as those tied to the euro - STASIS EURS (Ethereum blockchain).

Over the past week the number of cryptocurrencies with a capitalization of more than $1 billion remained the same at 15, however the price of all of them decreased except IOTA (+6.7%), Bitcoin (+4.4%), TRON (+1.9%), and Tether (the price of which is tied to the US dollar).

The coins and tokens from the top 100 that demonstrated the largest price growth are given in Fig. 2.

Biggest gainers and losers over the week (August 19-26, 2018)

The prices of some cryptocurrencies may fluctuate from -50% to +50% over the course of a single day. Therefore, when analyzing cryptocurrency price trends, it is advisable to use their average daily amounts on various cryptoexchanges.
Below we consider the 10 cryptocurrencies that demonstrated the most significant change in price over the past week (Fig. 2-3). In this regard, only those coins and tokens included in the top 100 by market capitalization were considered2.

Figure 2. Largest growth in prices over the past week

Tables 1.2 and 1.3 show the possible factors or events that might have influenced the fluctuation in prices for certain cryptocurrencies. Table 1.4 shows the possible factors or events that might have influenced the cryptocurrency market in general.

Table 1.2. Factors or events that might have led to a growth in cryptocurrency prices over the past week

A depreciation in price was seen last week for 271coins and tokens from the top 500 cryptocurrencies and digital assets by capitalization. The ten cryptocurrencies from the top 100 that experienced the most noticeable drops in price are shown in Fig. 3 and Table 1.3.

Figure 3. Largest fall in prices over the past week

Table 1.3. Factors or events that might have led to a fall in cryptocurrency prices over the past week

Table 1.4 shows events that took place from August 20-26, 2018, that had an impact on both the prices of the dominant cryptocurrencies and the market in general, with an indication of their nature and type of impact.

Table 1.4. Key events of the week having an influence on cryptocurrency prices, August 20-26, 2018

To analyze trading activity on cryptocurrency exchanges, the ZAK-n Crypto index is calculated (see the Glossary). The values of the ZAK-4 Crypto and ZAK-8 Crypto indices are presented in Tables 1.1, 1.5.a, and 1.5.b. In August the 24-hour trading volumes (Volume 24h) for the four dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple) equaled from $4.9 billion to $8.1 billion (Table 1.5.a). The value of the daily ZAK-4 Crypto ranged from 2.9% to 5.2% of capitalization. The highest trading volume was seen on August 14, and the lowest was seen on August 26.

Table 1.5.a. Daily ZAK-4 Crypto index calculation (from August 1-26, 2018)

By the end of the week the 24-hour trading volumes (Volume 24h) for the eight dominant cryptocurrencies not including Tether (Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Stellar, EOS, and Cardano) equaled $5.6 billion (Table 1.5.b), or 3.1% of their market capitalization. Activity has fallen since the start of the month. The ZAK-4 Crypto and ZAK-8 Crypto indices are considered in more detail in Tables 1.5.a and 1.5.b.

Table 1.5.b. Daily ZAK-8 Crypto index calculation (continuation of Table 1.5.а)

Table 1.6 gives a list of events, information on which appeared last week, which could impact both the prices of specific cryptocurrencies and the market in general.

Table 1.6. Events that could have an influence on cryptocurrency prices in the future

Market trends

The weekly cryptocurrency and digital asset market trends from December 31, 2017, to August 26, 2018, are presented as graphs (Fig. 1.1-1.5).

Table 1.7. Legends and descriptions of the graphs

Figure 1.1. Total cryptocurrency market capitalization

Figure 1.1 shows a graph of the weekly cryptocurrency market change from December 31, 2017, to August 26, 2018. Over this period, market capitalization dropped from $572.5 billion to $214.3 billion, i.e. by 63%. Last week (August 19-26, 2018) cryptocurrency market capitalization increased slightly from $212.3 billion to $214.3 billion (as of August 26, 2018, based on the average daily figures from coinmarketcap.com).

Figure 1.2. Change in market capitalization

The market is susceptible to sudden and drastic fluctuations. Nine of the thirteen weeks in the first quarter of 2018 were “in the red,” i.e. capitalization fell based on the results of each of these weeks, and the weekly fluctuations ranged from USD -136 billion to USD +250 billion.

Six of the thirteen weeks in the second quarter were “in the red.” The market grew based on the results of the other seven weeks. As noted earlier, a growth was seen in April, while in May and June there was generally a reduction in capitalization. The weekly fluctuations ranged from USD -72 billion to USD +62.2 billion.
Four of the past eight weeks of the third quarter saw an increase in capitalization, and four a decrease (with due account of average daily data of coinmarketcap.com, see Fig. 1.2). On the whole, since early July capitalization has fallen by approximately $40 billion.

Figure 1.3. Number of cryptocurrencies and digital assets

Since December 31, 2017, the total number of cryptocurrencies and digital assets presented on coinmarketcap has increased from 1,335 to 1,890. However, when calculating cryptocurrency market capitalization only those coins and tokens on which there is information on trades (trading volume) are taken into consideration. Over the past week their number increased from 1,743 to 1,801, while average capitalization decreased to $119 million. In total, over the past month 226 new coins and tokens have appeared on coinmarketcap.com. However, it should be noted that a number of other coins and tokens were also excluded from the list. Among the tokens that were added to coinmarketcap.com last week, KNOW, DPRating, Credit Tag Chain, and RRCoin showed high trading volumes.

Figures 1.4 and 1.5. Forecast of total cryptocurrency market capitalization

The adjustment of the cryptocurrency market is determined to a great extent by the mechanisms of state regulation and restrictions being introduced, as well as the actions of institutional backers and major cryptocurrency market players. However, hundreds of billions of US dollars have already been poured into the cryptocurrency market and blockchain. Therefore, this adjustment is sure to end at some point. Meanwhile, for nearly six months now the benefits have been going mainly to those betting on a fall in prices. One also gets the impression that constant manipulation is taking place on the cryptocurrency market. This is connected with the problems of rapid growth, decentralization of processes, and the immaturity of international regulatory mechanisms.

The scale and potential of the cryptocurrency market are huge. Just like any economy develops in a cyclical manner, the rapidly developing crypto industry has also seen at least 4-5 clearly discernable peaks and valleys starting from 2013. Each surge gives new projects, technologies, and ideas the chance to enter the market, and each fall makes it possible to weed out scams and ineffective projects. In just 2-3 years, only 20% of all projects currently presented on coinmarketcap.com will remain, but they will form the framework and foundation for the gradual transition to the digital economy on blockchain and tokenization of the overwhelming majority of assets.

The next stage will be the formation of the market of security tokens. During this stage the economy will reach a truly global scale. An increase in the number of assets in the crypto industry and their higher level of decentralization could fundamentally change the principles of economics and international relations. In this regard, the tokenization of the economy will also be cyclical in nature, with alternating stages of growth and decline (crisis). The existence of a multitude of problems and difficulties only opens up new vistas for the talented.

ICO Market Analysis (August 20-26, 2018)

1. General analysis of the ICO market (by week, month)

1.1. Brief overview of ICO market trends

Table 1.1. Brief ICO market overview, key events, news for the past week (August 20-26, 2018)

Table 1.2 shows the development trends on the ICO market since the start of May 2018. Only popular and/or successfully completed ICOs (i.e. ICOs which managed to collect the minimum declared amount of funds) and/or ICOs listed on exchanges were considered.

Table 1.2. Aggregated trends and performance indicators of past (completed) ICOs1,2,3

The data for the previous period have been adjusted to account for the appearance of more complete information on past ICOs. Over the past week (August 20-26, 2018) the amount of funds collected via ICOs equaled $54.8 million. This amount consists of the results of six completed ICOs, with the largest amount of funds collected equaling around $38.5 million by the Bytemine ICO, which is still in the process of collecting funds. The average collected funds per ICO project equaled $9.1 million (see Tables 1.2, 1.3). A total of more than 35 ICOs were completed last week. However, not all projects indicate the amount of funds collected on their official websites (Table 1.5).

Table 1.3. Amount of funds collected and number of ICOs

Table 1.3 shows that the largest amount of funds was collected via ICOs in March 2018, mainly due to the appearance of major ICOs. The highest average collected funds per ICO was also seen in March 2018.

Figure 1.1. Trends in funds collected and number of ICOs since the start of 2017

1.2. Top ICOs during the last week

Table 1.4. Top 6 ICOs by the amount of funds collected (August 20-26, 2018)

The data for the previous period (August 20-26, 2018) may be adjusted as information on the amounts of collected funds by completed ICOs is finalized.

Last week’s leader was the Bytemine project, which continues to sell tokens as part of its PRE SALE and has already collected around $38.5 million through the sale of more than 217 million BYTM tokens. The owners of Bytemine tokens will receive annual bonus payments based on the quantity of coins they possess.

According to the data of the Bytemine website, this is a widely diversified project aimed at several areas: mining, raw materials (commodities), finance, technology, and banking. Bytemine plans to issue tokens supported by certain goods such as natural gas, copper, oil, gold, and much more.

Figure 1.2 shows the six largest ICOs.

Figure 1.2. Top 6 ICOs by the amount of funds collected (August 20-26, 2018)

The other projects that completed their ICOs last week (August 20-26, 2018), the websites of which do not clearly present the amount of funds collected, are given in Table 1.5.

Table 1.5. Completed ICOs (August 20-26, 2018)

It can be assumed that part of the projects from the above list did not collect the minimum required amount (soft cap) and may be scams. Only one project (OkeyDokey) clearly stated on its website that they did not reach their soft cap and announced that they were going to return the collected funds. The crisis in the crypto industry is taking a toll on funds collected via ICOs.

1.3. Top ICOs in the Mining category

The list of top ICOs by category is compiled with due account of the categories of the leading ICOs for the week. The Bytemine project was among the top 10 largest projects by the amount of funds collected via ICO in the Mining category (Table 1.6).

Table 1.6. Top 10 ICOs by the amount of funds collected, Mining category

Most projects from the top 10 in the Mining category do not currently have data on token performance.
One that does, the Ice Rock Mining project, has a current token price to token sale price of 0.21x, i.e. its price is 79% lower than during the ICO. The current market capitalization of Ice Rock Mining is around $4 million. However, it should be remembered that this project completed its ICO in late May 2018, and during this same period the capitalization of the cryptocurrency market as a whole has fallen by approximately 50%.

The Russian project Russian Mining Center can also be included in the top ten. According to the data of forklog, this project collected a record amount for a Russian ICO: $43.2 million.

Figure 1.3. Top 10 ICOs by the amount of funds collected, Mining category

During the analyzed period (August 20-26, 2018) more than 35 ICO projects were completed, and at least six projects have openly indicated the amount of funds collected on their websites and this amount exceeds $100,000. The total amount of funds collected equaled more than $50 million. Last week’s leader was the Bytemine project. The total amount of funds collected by a number of ICOs failed to reach even $100,000 (the information for some projects is still being finalized). A clear trend is being seen toward a fall in the amount of funds collected via ICOs, which is directly related to the fall in cryptocurrency market capitalization since the start of 2018.

The Glossary is given in the Annex.