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 July 2018, including over the past week (July 23-29, 2018).

Information as of July 30, 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 (July 22-29, 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 May 1, 2018, to July 29, 2018

Cryptocurrency market capitalization increased over the analyzed period (July 22-29, 2018) and as of 03:00 UTC equaled $297.8 billion (see Table 1.1). The dominance of the four and eight largest cryptocurrencies as of 03:00 UTC on July 29, 2018, equaled 74% and 81.5%, respectively, with bitcoin dominance rising to 47.3% (see Table 1.1).

The growth in cryptocurrency market capitalization compared to the start of the month equaled around $40 billion. This growth was mainly due to bitcoin, which appreciated by $31 billion, while altcoins appreciated by only $9 billion.

During the period from July 22-29, 2018, cryptocurrency market capitalization fluctuated from $279.7 billion (min) to $304.4 billion (max) (Fig. 1a), i.e. within a range of $25 billion. For its part, bitcoin capitalization fluctuated from $126.8 billion (min) to $144.5 billion (max), i.e. within a range of $18 billion.

It is worth noting the downward adjustment that took place during the night of July 26-27, when cryptocurrency capitalization fell by $14 billion over the course of 2.5 hours, and the bitcoin price depreciated from $8280 to $7880, i.e. by $400. Reciprocally, on the evening of July 27 an upward spike was seen, with capitalization and the bitcoin price recovering over the span of two hours. This leads to the question of what is causing these drastic changes? Many experts attribute it to the actions of the US Securities and Exchange Commission (SEC), specifically the official announcement of the SEC that the adoption of a decision on the five applications to issue bitcoin ETFs filed by the company Direxion had been postponed until September 21. In reality, however, the decision in question was already adopted on July 24. Another SEC decision (dated July 26, 2018) is connected with the creation of the Winklevoss Bitcoin Trust (Repeated failure of SEC in the creation of bitcoin-ETFs). You will recall that the SEC had previously rejected all applications on the issue of bitcoin ETFs. In response to the application of the Chicago Board Options Exchange (CBOE Global Markets), the SEC asked for comments.

Figure 1a. Cryptocurrency market capitalization since July 22, 2018

Figure 1b shows bitcoin capitalization (red line) superimposed on cryptocurrency market capitalization (blue line). The lines are practically identical, but more intensive growth in bitcoin can be seen compared to overall market capitalization. Ultimately, over the past week bitcoin dominance increased by 2.1%, from 45.2% to 47.3% (see Table 1.1).

Figure 1b. Capitalization of the cryptocurrency market (blue) and bitcoin (red) since July 22, 2018

The arrows mark the sharp increases in 24-hour trading volumes on the cryptocurrency market to $37-38 billion on July 24 and 28 (Fig. 1b).

The increase in trading volume on July 24 can be attributed mainly to bitcoin, and that on July 28 - to Ethereum. In particular, on July 28 a flurry of ETH/USDT transactions made the little known EXX exchange one of the leaders in trading volume.

The rise and fall of cryptocurrency prices over the past seven days (July 22-29, 2018)

Last week’s leaders from among the top 500 cryptocurrencies by capitalization, which showed an appreciation of more than 100%, were the projects Refereum (+222.5%), DMarket (+176.1%), and adToken (+129.8%). The growth of FuzeX (+84.9%), ZClassic (+77.6%), Scroll (+76.4%), BitMart Token (+57%), and Crypterium (+50%) should also be noted.

During the period from July 22-29, 2018, the change in the prices of cryptocurrencies in the top 500 ranged from -42.55% (Bitcoin Diamond) to +222.5% (Refereum). Last week (July 22-29, 2018) there was a downward adjustment in the price of Bitcoin Diamond (-42.55%), which was the growth leader (+72%) among coins and tokens from the top 100 by capitalization a week ago (July 15-22, 2018) after its listing on the major exchange HitBTC (https://twitter.com/BitcoinDiamond_/status/1019863997665837057). The Refereum price rose sharply after favorable news on this crypto’s simultaneous listing on two large exchanges, Bittrex and Upbit. At the beginning of the month this coin was trading at a price of 0.4 of a cent, but the price had increased to 0.8 of a cent by Thursday, and after the announcement of another listing the price of the coin settled in at 1.1 cent on Saturday (https://twitter.com/Refereum/status/1022644339787280389)

The price of 228 cryptocurrencies and digital assets from the top 500 showed growth, including 51 from the top 100.
Over the past week the number of cryptocurrencies with a capitalization of more than $1 billion remained the same at 19, with the price of all of them increasing except Tezos (-6.48%), Dash (-5.81%), Cardano (-3.1%), NEO (-0.72%), XRP (-0.02%), and Tether (the price of which is tied to the US dollar). The growth in prices equaled: VeChain (+43.1%), Binance Coin (+17.6%), Bitcoin (+10.5%), etc.

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 (July 22-29, 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 (Fig. 2, Fig. 3) 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 272 coins 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 July 23-29, 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, July 23-29, 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 July the 24-hour trading volumes (Volume 24h) for the four dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple) equaled from $4.6 billion to $10.8 billion (Table 1.5.a). The value of the daily ZAK-4 Crypto ranged from 2.5% to 5.2% of capitalization. The highest trading volume was seen on July 24.

Table 1.5.a. Daily ZAK-4 Crypto index calculation (from July 1-29, 2018)

By the end of the week the 24-hour trading volumes (Volume 24h) for the eight dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Stellar, EOS, and Cardano) equaled $7.5 billion (Table 1.5.b), or 3.1% of their market capitalization. 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

1.2. Market trends

The weekly cryptocurrency and digital asset market trends from December 31, 2017, to July 29, 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 July 29, 2018. Over this period, market capitalization dropped from $572.5 billion to $297.4 billion, i.e. by 48%. Last week (July 22-29, 2018) cryptocurrency market capitalization increased from $282 billion to $297.4 billion (as of July 29, 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.

Three of the past four weeks of the third quarter saw an increase in cryptocurrency market capitalization (with due account of average daily data of coinmarketcap.com, see Fig. 1.2).

Figure 1.3. Number of cryptocurrencies and digital assets

Since December 31, 2017, the total number of cryptocurrencies and digital assets considered when calculating market capitalization has increased from 1,335 to 1,605. Over the past week their number increased from 1,578 to 1,605, and average capitalization increased to $185.3 million. In total, over the past month 102 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, Linfinity, Consentium, Blue Whale Token, MTC Mesh Network, ThingsOperatingSystem, DACC, WABnetwork, and ZPER token showed high trading volumes.

Figures 1.4 and 1.5. Forecast of total cryptocurrency market capitalization, USD billion

The last two weeks (July 15-29) have been positive for bitcoin. Its dominance has drawn near to 50% (47.83% on July 30, 2018, which is the highest mark in 2018). The price of the cryptocurrency market leader increased by nearly $2,000, from $6,300 to $8,200. Bitcoin might receive offline transaction support (proposal 174 (BIP174)), and the number of open Lightning Network channels in the bitcoin network is growing and already exceeds 10,000. According to the information of CCN dated July 25, the first EFP transaction in the cryptocurrency industry using bitcoin futures took place between two institutional investors (futures trading platform ED&F Man Capital Markets and the cryptocurrency exchange itBit). The EFP transaction was performed through the Chicago commodities exchange (CME Group).

According to Omkar Godbole, an analyst at CoinDesk, the first cryptocurrency has grown by up to 45% over the month and is likely preparing for a stage of “…long-term bullish reversal”).

Last week teemed with various events related to the crypto industry, most of which can be characterized as favorable.
Fortune magazine has presented the cryptocurrency version of the 40 under 40 rating, which includes well-known representatives of the crypto industry under the age of 40. The first three spots are held by Brian Armstrong, the CEO of the American exchange Coinbase, Vitalik Buterin, the founder of Ethereum, and Jihan Wu, co-founder of the largest Chinese crypto mining company Bitmain, which has already been appraised at $12 billion, and the value of which might increase to $15 billion by the end of July after the completion of the next round of financing (series C) with the attraction of another $1 billion.

Important events also took place for the second cryptocurrency by capitalization, Ethereum. The developers of Ethereum have already started testing the code of the Constantinople hard fork, the latest system-wide upgrade of the network. According to the announcements of the developers (Jordi Baylina, Jacques Dafflon, and Thomas Shababi) published in ETHNews, the ERC777 standard Ethereum tokens are in the final stages of development and will be presented in August.

There were notable movements among major institutional players and countries during the week.
As reported by CoinDesk, the G20 member countries are developing anti-money laundering standards on cryptocurrencies. The AML standards will be completed by October 2018.

According to information from Bloomberg, a closed meeting organized by Nasdaq, one of the largest stock exchanges, was held in Chicago last week between representatives of the traditional banking sector and several bitcoin exchanges.
India will prepare draft regulations on cryptocurrencies by September, and the proposed rules will not contain a direct ban on cryptocurrencies.

Nanjing, the capital of the Jiangsu Province in China, has launched a 10-billion-yuan ($1.48 billion) blockchain investment fund to facilitate the development of the digital economy and public blockchain projects. Also this week, the Galaxy Digital Ventures LLC cryptobank headed by billionaire Mike Novogratz invested $52.5 million in the American firm BlockFi. Previously, in June, Binance Labs announced its plans to introduce a $1 billion fund to support companies working in the area of blockchain and digital currencies.

South Korean telecom giant KT Corporation has created its own blockchain network. Pursuant to the report of CoinDesk Korea, KT Corporation announced that its KT Network Blockchain has a throughput capacity of 2,500 transactions per second (TPS) and plans to increase this capacity to 10,000 TPS by the end of the year and to 100,000 TPS by 2019.
The Trade.io cryptocurrency exchange has been unveiled, and the Gibraltar stock exchange has launched a cryptocurrency trading platform.

The above facts attest to the fact that the cryptocurrency market is developing rapidly.

ICO Market Analysis (July 23-29, 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 two weeks from July 23-29, 2018

Table 1.2 shows the development trends on the ICO market since the start of the second quarter of 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 (July 23-29, 2018) the amount of funds collected via ICOs equaled $96 million. This amount consists of the results of 11 successfully completed ICOs, with the largest amount of funds collected equaling $21.8 million (Staramba ICO). The average collected funds per ICO project equaled $8.7 million (see Tables 1.2, 1.3). A total of approximately 35 ICOs were completed last week. However, not all projects indicate the amount of funds collected on their official websites.

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 analyzed period

Table 1.4 shows the ten largest ICOs.

Table 1.4. Top 10 ICOs by the amount of funds collected (July 23-29, 2018)

The data for the previous period (July 23-29, 2018) may be adjusted as information on the amounts of collected funds by completed ICOs is finalized.

The leader of the period was the Staramba project, which positions itself as the most progressive high-tech company of the social VR network in the world. STARAMBA.spaces will be a place where people can carry over their previous relations to the virtual world.

STARAMBA sees itself as a pioneer in VR and is an important partner to the most well-known brands throughout the world and world famous stars of sport, music, and entertainment in terms of the development of this virtual world and community of users. STARAMBA SE works with the largest Hollywood studios and brands such as KONAMI.

According to information from the project’s website, ITO backers will receive a 90% discount on the purchase of existing starting content. The cost of the token during the ITO was set at $0.1, and the planned price of products in the VR ecosystem after the ITO is around $1-1.4 for one token (STT).

Figure 1.2 presents the ten largest ICOs completed during in early July.

Figure 1.2. Top 10 ICOs by the amount of funds collected (July 23-29, 2018)

1.3. Top ICOs in the Gaming & VR category

The list of top ICOs by category is compiled with due account of the categories of the leading ICOs for the week. The Staramba project was among the top 10 largest projects by the amount of funds collected via ICO in the Gaming & VR category (Table 1.5).

Table 1.5. Top 10 ICOs by the amount of funds collected, Gaming & VR category

At present, all projects from the top 10 in this category have a token performance indicator of 0.17x to 4.22x. The most successful exchange listing among the ten presented is the Decentraland project, as it has a current token price to token sale price ratio of 4.22x. When considering this indicator, it is important to remember that the Decentraland ICO was completed on August 17, 2017, i.e. the 4.22x growth took place over approximately eleven months. Decentraland’s current market capitalization exceeds $131.5 million.

Figure 1.3. Top 10 ICOs by the amount of funds collected, Gaming & VR category

During the analyzed period (July 23-29, 2018) at least 11 ICO projects were successfully completed, each of which collected more than $100,000, with the total amount of funds collected equaling more than $96 million. Last week’s leader was the Staramba project, which collected $21.8 million. 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).

The Glossary is given in the Annex.

Annex

Glossary