Weekly Investor Letter
Apr. 4 — Crypto assets surged 22% this week, gaining over $30 billion, pushing total market value to $173 billion, its highest level since November 2018 just before the major Q4 sell-off. The Crescent Crypto Market Index () gained 24% while rose 25% over the same period.
Intra-week volatility came roaring back this week with many crypto assets jumping +20% since late Monday night.
BCH gained over 75% this week as it played catch up to ’s initially move higher Monday night.
The move in in the early morning hours of April 2nd where jumped over 1,000 points in a single hour on significant volume. is an excellent write up that goes into the mechanics of the action. The move was and likely the combined result of: a large price-insensitive buyer, information leakage, and leveraged short positions on offshore futures exchanges. Simply, a large buy order started the move, and short-covering added fuel to the fire.
The price boost was initially faded but the rally resumed with more steam yesterday afternoon, as exceeded $5,300. Clearly, the market is “awake” and volumes remain elevated.
bitcoin vs. CCMIX
March 28th — April 4th, 2019
Crescent Crypto Market Index (CCMIX)
Crescent Crypto Market Index Constituent Performance
March 28th — April 4th, 2019
Summary
- BCH was this week’s clear winner, surging over 75% in just the last three days. Its price peaked near $340 on Wednesday before falling to its current level of $300.
- NEO, LTC, ADA, and BSV all recorded +30% gains on the week.
- Every constituent gained at least 10% week-over-week. XRP was the worst performer of the group, rising just 10%, as the third largest crypto asset continues to lag the broader market.
- XLM and TRX also trailed other constituents, though the former is still up 44% over the last month compared to just 12% for the latter.
- BCH again outpaced BSV by a wide margin this week (~45%).
- BTC gained 25% week-over-week as its dominance rose slightly from 50.3% to 50.9%.
Notable News
What Happened? The recent run-up was likely triggered by a 20,000 buy order spread across three exchanges, , Kraken, and Bitstamp. Oliver von Landsberg-Sadie, CEO of prime broker BCB Group, came out said “There’s has been a single order that has been algorithmically-managed across these three venues, of around 20,000 . If you look at the volumes on each of those three exchanges — there were in-concert, synchronized, units of volume of around 7,000 in an hour.”
Why Does This Matter? This recent rally brought exchange volumes that were in line with those from December 2017. Although the order is a significant one at $80-$100 million, it’s minimal when compared to actual volume, implying the rally and sustained price levels are based on genuine renewed interest. ’s “Real 10” 24hr volume is currently ~$1.4 Billion, and this level has been sustained since the rally began. Price rallies historically beget renewed investor interest, and that’s as evident today as ever before even though receive considerably less media attention relative to December 2017. There currently isn’t any transparency into the identity of buyer, and it’ll likely remain this way.
What Happened? On April 3rd, the issued a framework to help issuers better understand whether or not a is likely to be considered a security. This has been long awaited, and expected, after the ICO craze in 2017. It was mostly written by Director Hinman, who is known in the crypto community by his speech last summer where he declared that ether may not be a security, and Valeria Szczepanik, who heads up their digital asset division.
Why Does This Matter? This is generally a positive development for the space, but it’s far from perfect. The press release for the 13 page report states “The framework is not intended to be an exhaustive overview of the law, but rather, an analytical tool to help market participants assess whether the federal securities laws apply to the offer, , or resale of a particular digital asset.” It certainly helps start ups better understand the criteria they need to address when deciding whether or not their will likely be deemed a security. At the same time, the criteria itself might be so constraining that it has the potential to stifle innovation.
What Happened? issued its first “no-action” letter to TurnKey Jet, a start-up offering all-inclusive private jet services, in their quest for -based capital raising. The process was long and arduous, taking 11 months to complete, and came with a list of conditions including:
-TKJ will not use any funds from to develop the technology
– will be immediately usable
-TKJ will restricts transfers of to TKJ Wallets only
-TKJ will sell all at a price of one USD per , and their price will remain fixed
-Repurchases will only be made at a discount to the
-TurnKey Jet will emphasize the functionality rather than the profit potential of the
Why Does This Matter? Crescent’s quick answer: It doesn’t matter. “It is certainly encouraging to see progress and cooperation between the and companies looking to properly issue . In addition, the guidance issued by the will hopefully make the process more straightforward when other companies follow suite. While this is progress, it’s still worth keeping in mind that most offerings do not fulfill the conditions above.
“The issue most coin offerings undertaken to date will face is that they possess many elements common to products that, in the past, courts have found to be security-like,” Preston Byrne, a lawyer at Byrne & Storm, P.C., told CoinDesk.” Although the no-action letter is a new development, I don’t see it creating a viable issuance pathway within the United States for the crypto- products most enterprises are hoping to build.”
This is more a testament to the difficulty of complying with a grey regulatory regime, than it is to progress. What’s more is that the is USD-pegged — so its not as if the “no action letter” pertains to a bolder project.
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Published at Mon, 15 Apr 2019 14:04:39 +0000
