Analysis of the Last Week in Blockchain
(November 7, 2016 — November 13, 2016)
Bitcoin, Ether, & Blockchain Asset Price Movement
Last week was volatile in the bitcoin market once again. After beginning the week at $710, the price surged yet again to $745 before falling south of $690 and recovering back to $705 back to represent an overall weekly loss of -.83%.
Year to date, bitcoin is now up 62.30%. Against the years low in January, bitcoin is up 96.54%, and against the year’s high in June, bitcoin is now down -8.22%.
Since the start of August just 3 months ago, bitcoin is now up 27.55%.
With about 15.987 million bitcoin mined at this point, the current price represents a total market cap over $11.2 Billion.
Ether fell relative to USD last week, beginning the about $10.85 and falling steadily throughout the week to $10.20 to represent an overall loss of -5.75%.
Year to date, ether is up 975% as compared to the dollar after a massive early rise rise.
As ether’s decline was more pronounced than bitcoin’s, the price also fell relatively, representing an overall weekly loss of -4.68%.
Year to date, ether’s value relative to bitcoin is up 571%.
Last week, the LBI experienced similarly volatility, falling from about $192.50 to $190 after a quick mid-week move north of $200 that quickly reversed by week end to represent an overall weekly loss of -1.25%.
Since its inception on January 1, 2015, the LBI is now up 90.26%, & since the start of the year, the LBI is now up 60.82%.
Last week, we saw mixed yet mostly negative performance in the blockchain asset markets.
The below chart gives an overview of how the LBI, some of its Blockchain Asset constituents, & two traditional financial benchmarks (S&P 500 & Gold) performed last week:
Of the assets featured in the chart above:
- XMR & S&P 500 were the highest weekly performers, up 31.91% & 1.54%, respectively.
- STEEM & ETH were the lowest weekly performers, down -23.47% & -5.75%, respectively.
Blockchain News
Last week was packed with mixed and muddled news across the space to match the asset class’ price movement and the feel of the global macroeconomic and political climate.
During last week’s U.S. Presidential election between Donald Trump and Hilary Clinton, we saw extremely quick movements in the traditional and blockchain markets as expectations and realities began to shift.
As it became increasingly apparent that Trump would take the victory, the traditional equity futures markets initially plummeted, with bitcoin moving inversely and rising markedly, only for each to converge back to near their original positions within a short time period. It would appear that most market participants are somewhat shocked yet standing by and awaiting the actual actions and decisions to come.
I spoke with Karen Webster of PYMNTS.com on their Topic TBD podcaston Friday about some of these events and market movements, the macroeconomic environment and global uncertainty, and how bitcoin and blockchain assets can fit into investors heads and portfolios.
Chris Burniske of ARK Invest also spoke on Bloomberg about Trump and bitcoin’s potential as a “safe haven” or “uncorrelated” asset, as well as its function as something of a “gold 2.0” or “gold that can teleport”.
Coindesk also covered the election and its effects on the present and future of the ecosystem.
Deutsche Bank’s Global Transaction Banking department recently released a report entitled “Powering the flow of global capital — capital markets investor insights” in which one of the 3 major trends mentioned was “Blockchain is coming sooner than you think”.
“Investors are optimistic about blockchain and the pace of its implementation
but not everyone agrees on what it will look like when done”
The CME (Chicago Mercantile Exchange, one of the largest derivatives exchanges in the world), launched 2 bitcoin index products intended to be used as reference rates in new financial products like bitcoin derivatives or ETFs.
Crypto Facilities designed the index with the CME and several of the top bitcoin exchanges including Bitfinex, Bitstamp, GDAX, itBit, Kraken, and OKCoin will be providing data.
Blockchain (the bitcoin wallet company) is said to be beta testing a purchase option within their wallet through a partnership with Coinify.
As Coinify ($4M) and Blockchain ($30M) are both well funded, and as Blockchain reports to service a large percent of the existing market of bitcoin wallet holders, the feature addition could potentially expose a large number of users to an option to buy (or sell) more bitcoin within their application.
Golem, a project dubbed the “AirBnB for computers” and intended to reside on the Ethereum blockchain in the form of an overall application (or back-end system) for users to buy or sell unused computing power (CPU or GPU time) as well as a token, GNT, designed to be core to the network and used for things like paying other users for computing resources, dominated a lot of the interest of the Ethereum market last week.
GNT was issued in a public crowdfunding that took place on Friday, November 11 pursuant to the “smart contract” code written in an Ethereum address. 820 million GNT were distributed to Ethereum addresses at a rate of 1,000 GNT to 1 ETH, with a maximum of 820,000 ETH.
180 million additional GNT were then immediately allocated to Golem, early employees, and investors, however subject to “lock-up” (non-transferability) for 6 months.
I covered many of the details of the Golem project, crowdfunding, structure specifics, and more in a CoinDesk guest piece published just before the crowdsale smart contract went live.
Initial demand was extremely large and seen quickly,
and much like many of the recent capped sales seen in the article, all of the GNT ever to be created was entirely issued and allocated within 30 minutes.
Etherscan currently reports that 675 addresses hold all of the GNT (worth about $15k each at crowdfunding exchange rates), with the top 100 holders owning 91%.
At this point, none of the common exchanges for early blockchain asset trading like Poloniex, Bittrex, Shapeshift, or Kraken have yet to announce support.
Since the start of Zcash (ZEC) mining, the market cap has been volatile yet continued to rise, while the price has plummeted from its initial astronomical open. As we continue through ZEC’s “slow start” period and the supply is just a tiny fraction of what it will be in the near future, the price per unit necessary to reflect a large market cap is massive.
For an overview or recap on Zcash’s supply structure (especially in relation to bitcoin’s), check out my CoinDesk guest article:
For some additional food for thought, Fortune put out a piece last week on the growing universe of blockchain assets with a public poll at the end asking “Which digital currency is most likely to be around in 2021?”. Your choices were “Bitcoin”, “Ethereum”, “Ripple”, “All of them”, or “None of them”, and when I checked the results were as follows:
-Alex Sunnarborg
Founder & CFO, Lawnmower.io
This post originally appeared as part of the weekly update on the Lawnmower Blog where you can view more stories and analysis on the blockchain space.
Disclaimer: All viewpoints are completely my own. Nothing presented represents the viewpoints, opinions, etc. of any corporation or organization and all data/charts/analyses are for illustrative and discussion purposes only and should not be construed or interpreted as fact, advice, recommendation, or anything of similar nature.
