Crescent Crypto
Dec 13, 2019 · 6 min read

Weekly Market Update 11/7 — Flat Market

Weekly Market Recap

Nov 7- Crypto assets stayed relatively flat this week, bringing the total crypto market cap to $249bn up from $248bn. The Crescent Crypto Market Index (CCMIX) was up 0.36%, while BTC decreased by 0.09% over the same period. Every index this week outperformed Bitcoin. With that said CCALT saw by far the largest gains up around 7%. The Market Index underperformed all other indices over the last seven days. This overall sideways move follows a period of strong price rally which saw BTC hit $10k.

Sector Performance

Bitcoin vs. CCMIX vs. CCALT vs. CCDARK vs. CCSMART

Nov 1st — Nov 7th, 2019

Market Index Constituent Performance

Nov 1st — Nov 7th, 2019

Summary

  • BTC performed at the bottom of the pack this week, with 5 out of the 6 constituents ending in the green. Bitcoin was up 1%.
  • The CCMIX ended the week slightly above BTC. This is primarily due to support from XLM, which increased by 18%. The index was dragged down by BTC and XRP.
  • CCSMART, CCALT, and CCDARK overperformed Bitcoin, generating returns of 4%, 2%, and 7% respectively.
  • XRP rebounded last week up 8% but ended this week in the red down 2%. It was the worst-performing constituent.
  • ETH ended last week in the middle of the pack up around 13%. and again ended this week in the middle of the pack up around 2%.
  • XLM was the worst performer last week with a 5% increase but was by far the best performer this week up around 18%.
  • Bitcoin dominance decreased to 66.9%, down from around 67.6% last week.

Notable News

Chinese Agency Scraps Plan to Eliminate Bitcoin Mining Industry

What Happened?

The China National Development and Reform Commission has scrapped its previous plans to categorize bitcoin mining as an industry to be phased out from the country. This news comes from a finalized new Catalog for Guiding Industry Restructuring and will take effect from Jan 1, 2020. Initially, in earlier drafts, bitcoin mining and other cryptocurrency mining has been removed from the document. During an NDRC press conference on Wednesday, officials said since the release of the initial draft, the agency has received over 2,500 suggestions on various issues, most of which were taken into consideration, although the officials did not comment on any particular suggestion related to bitcoin mining.

Why Does This Matter?

This is one of the few signals from China that they planning on adopting not only blockchain but also cryptocurrencies as a whole. This news coincides with recent news of Hong Kong taking a regulated, but positive approach to cryptocurrency exchanges. Along with the progress on Chinese’s digital currency, China has been releasing highly positive signals surrounding the digital asset ecosystem. As stated last week, President Xi’s comments were not a direct endorsement of bitcoin, but simply a Chinese digital currency utilizing blockchain technology. This “announcement”, or lack therefore of, is the first bits of information that could reveal China’s Bitcoin adoption.

Stellar’s Foundation Just Destroyed Half the Supply of Its Lumens Cryptocurrency

What Happened?

Denelle Dixon, CEO of the Stellar Development Foundation, announced from the stage of the Stellar Meridian conference has burned 55 billion of its XLM tokens — over half of the cryptocurrencies supply. There were 105 billion XLM in existence, with 20 billion in circulation. With this burn, the total supply has shrunk to 50 billion, leaving 30 billion not in circulation On the news of the announcement, XLM’s price increased by 14% to $0.08. Dixon stated, “I don’t know. I really just don’t have a sense at all of what the market response is. From my standpoint, it’s how the ecosystem feels about it. We got a lot of positive response from the ecosystem because we are rightsizing what the foundation has and the foundation holds.”

Why Does This Matter?

This is an overall positive signal for XLM holders. There will be less XLM released to induce selling pressure, and the Steller foundation recognized the unnecessary size of their initial holdings. The foundation now controls 30 billion XLM. It has 12 billion XLM in the direct development fund, 2 billion XLM for ecosystem support, 10 billion XLM for investments, and 6 billion XLM set aside for user acquisition. As there is no longer inflation in the network, 50 billion will be Stelllar’s final total supply. This is an unprecedented move made by the Stellar Development Foundation, and hopefully brings long-term benefits for Stellar. Both Stellar and Ripple have drawn criticism from market participants for outsized positions held by the foundation and company, respectively. One of bitcoin’s most attractive features is its limited supply and scarcity. In that vein, limiting the supply held by their Foundation, makes Lumens a more attractive asset. Although Lumens rallied, the performance was not commensurate with the supply cut. It’s an admirable move for the foundation to destroy a large amount of wealth for the confidence of Lumens holders — although it does raise questions regarding the power of a central authority in a decentralized network.

First-Time Bitcoin Buyers ‘Doubled’ in Square’s Q3 Report

What Happened?

Square’s third-quarter report further cemented Square’s impressive and successful Bitcoin endeavor. Square processed $148 million in bitcoin sales in Q3. Square reported revenues of $1.27 billion between July 1 and Sept 30 of this year. An investor letter outlined that first-time bitcoin buyers have approximately doubled (on the Cash app). Square’s bitcoin revenue represents a 244 percent increase year-over-year. In an investor letter Square stated, “We are increasing the upper end of our full-year 2019 total net revenue guidance by $110 million due to underlying trends in our Seller and Cash App businesses as well as bitcoin outperformance in the third quarter.”Despite the uptick in usage, Square has struggled to generate substantial profits through bitcoin, raising a scant $832,000 in Q1 and about $2 million in both Q2 and Q3.

Why Does This Matter?

It is always great seeing growth in retail interest in bitcoin. Square’s bitcoin generated revenue growth and the influx of first-time bitcoin buyers illustrates this trend, regardless of Square’s small profits, this may be more of a reflection of high costs. The company created a Square Crypto team to fund bitcoin protocol development apart from Cash App’s commercial concerns. This is both impressive and noble for Square to do. Cash App recently introduced a new fee structure for bitcoin purchases — as a whole, the fees are quite steep and we do not recommend buying bitcoin on Cash app.

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