This report was created by:
- 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;
This report presents data on the cryptocurrency and ICO market changes during 2017–2018. Special emphasis has been placed on an analysis of the changes that took place in February 2018, including over the last week (February 5–11, 2018).
1. General cryptocurrency and digital assets market analysis (by week, month, quarter). Market trends.
1.1 General cryptocurrency and digital assets market analysis (by week, month).
Table 1.1. Trends in capitalization of the cryptocurrency market and main cryptocurrencies from December 1, 2017, to February 11, 2018*
Since the beginning of 2018, cryptocurrency market capitalization has fluctuated by around $650 billion. Over the course of one month, capitalization has dropped from a maximum figure of $835.5 billion (on January 7, 2018) to $276.8 billion (on February 6, 2018). Last week (February 5–6, 2018) began with another fall to $276.8 billion (fig. 1), but by Friday capitalization had already grown to $458 billion. One of the reasons for the sharp decline on Monday and Tuesday was the fall in all exchange indices (see below).
The Smith + Crown Index for the week dropped to 19,894.
The dominance of the four and eight largest cryptocurrencies as of February 11, 2018, (00:00 UTC) equaled 69.2% and 77.2%, respectively, with bitcoin dominance equaling 34.4% (see Table 1.1).
Figure 1. Cryptocurrency market capitalization, February 5–11, 2018
Last week (February 5–11, 2018) overall cryptocurrency market capitalization decreased slightly, which led to a depreciation in the prices of 90% of cryptocurrencies and digital assets in the top 500 cryptocurrencies. A similar trend is constantly in evidence: if the cryptocurrency market grows, so do the prices of most cryptocurrencies, and vice versa. This allows us to talk of a high level of correlation between the prices of the main cryptocurrencies, and, therefore, to conclude that the prices of cryptocurrencies are susceptible to the influence of one and the same factors.
During the analyzed period, only 50 of 500 cryptocurrencies showed an increase in price. The coins and tokens from the top 500 that showed the highest price growth are presented in figure 2.
The growth and fall of cryptocurrency prices over the past week (February 5–11, 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 top 10 cryptocurrencies that showed the largest change in price over the past week (fig. 2–3). In this regard, only those coins and tokens included in the top 500 in terms of market capitalization (according to the data of coinmarketcap.com) were considered.
Figure 2. Largest growth in prices over the last week
Over the past week, the number of cryptocurrencies with a capitalization of more than $1 billion dropped from 26 to 24, and only four of them showed an increase in price over this period: Ripple, Lisk, Bitcoin Gold, and Zcash.
Tables 1.2 and 1.3 show the possible factors or events that could have influenced the fluctuation in prices for certain cryptocurrencies. Table 1.4 shows the possible factors or events that could have influenced the cryptocurrency market in general.
Table 1.2. Factors and events that could have led to a growth in cryptocurrency prices over the past week
Figure 3. Largest fall in prices over the past week
The fall in the prices of most cryptocurrencies over the past week by up to 15% is perfectly understandable and has to do with overall trends on the cryptocurrency market
Table 1.3. Factors and events that could have led to a fall in cryptocurrency prices over the past week
The consistent changes in the Dow Jones Industrial Average (DJIA) index and the bitcoin price over the past two weeks suggests that there is a certain connection (fig. 4). Naturally, volatility is much higher on the cryptocurrency market than on the stock market. For example, since January 30, 2018, the bitcoin price has fallen by 24.12%, while the DJIA has dropped by 7.39%. Nonetheless, this is an extremely notable drop for the stock market. On February 5 the Dow Jones index fell by 4.6% in one day, i.e. by more than 1,000 points, which is the largest one-day drop in the US’s main stock market index in the last 10 years.
The decline in the Dow Jones index was especially pronounced on February 5–6, 2018, and is attributed to an expected increase in the interest rate. On February 2, 2018, the US Department of Labor issued employment and wage statistics that were higher than expected. The published data may attest to an increase in consumer spending and could lead to a growth in inflation. To prevent possible inflation, the US Federal Reserve System will be forced to increase interest rates. The risk of an increase in interest rates has a fairly strong impact on the behavior of investors, who usually try to secure their profit in these situations.
Following the DJIA, similar behavior was seen on the S&P 500, the Nasdaq Composite, the Nikkei 225, and a number of other indices, which fell from November 6–10, 2018. The price of oil also fell.
Figure 4. Dow Jones Industrial Average (DJIA) Index and bitcoin price since January 30, 2018
Table 1.4 shows events that took place from February 5–11, 2018, and 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, February 5–11, 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. For example, on February 6, 2018, the 24-hour trading volume (Volume 24h) for the four dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, and Ripple) exceeded $23 billion (Table 1.5.a). The value of the ZAK-4 Crypto equaled 10.3%, which attests to the extremely high liquidity and market dynamism of the dominant cryptocurrencies. The value of the index increased during the downward adjustment of the cryptocurrency market (February 6, 2018), i.e. the daily turnover of cryptocurrencies exceeded 10% of their market capitalization.
Table 1.5.a. Daily ZAK-4 Crypto index calculation (from February 1, 2018, to February 11, 2018)
The 24-hour trading volumes (Volume 24h) for the eight dominant cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Stellar, NEO, and Cardano) equaled $13 billion at the end of last week (Table 1.5.b), i.e. 4% 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 October 1, 2017, to February 11, 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 October 1, 2017, to February 11, 2018. Over this period, market capitalization increased from $146.9 billion to $396.7 billion, a growth of 2,141% relative to the start of 2017. Over the first week of January 2018, total market capitalization exceeded $800 billion for the first time, but over the next five weeks (January 8-February 11, 2018) total market capitalization fell from $822.5 billion to $396.7 billion (as of February 11, 2018, based on the average figures from coinmarketcap.com), i.e. by more than half.
Figure 1.2. Change in market capitalization
Despite the significant growth in cryptocurrency market capitalization in 2017, the market is susceptible to sudden and drastic fluctuations. The highest growth rate in Q4 2017 was around $200 billion, or 54%, during the week of December 17–24, 2017. During the first week of January, market capitalization increased by approximately $250 billion, or 44%, but over the following five weeks decreases of approximately $100 billion, $130 billion, $20 billion, $136 billion, and $46 billion, respectively, were seen (with due account of average daily data, see fig. 1.2).
Figure 1.3. Number of cryptocurrencies and digital assets
The total number of cryptocurrencies and digital assets listed on exchanges has grown since the start of October from 1,091 to 1,466. Their number decreased by 16 over the past week, from 1,482 to 1,466. In this regard, over the past five weeks average cryptocurrency and digital asset capitalization has decreased from $607 million to $270.6 million.
Figures 1.4 and 1.5. Forecast of total cryptocurrency market capitalization
The market has been falling for five weeks in a row now. Capitalization has been more than halved. This is an ample adjustment after the headlong growth in December and early January, after which we can expect a bullish trend on the cryptocurrency market.
Even the company J.P. Morgan, in its report dated February 8, 2018, acknowledged cryptocurrencies as the “face of the innovative maelstrom”, despite the earlier declaration of company head Jamie Dimon that he believes bitcoin is a “fraud”. Meanwhile, the trust banks of Japan have been allowed to expand the methods of use of backers’ funds when entering the cryptocurrency sector. In this way, they will ensure a higher level of protection of transaction participants, including from the risks of fraud and bankruptcy of exchanges, through the professional management of contributed assets.
2. General analysis of the ICO market (by week, month).
2.1 Brief overview of the ICO market
Table 2.1 shows the development trends on the ICO market since 2017. 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 2.1. Aggregated trends and performance indicators of past (completed) ICOs1
The data for January and early February were adjusted to account for the appearance of more complete information on past ICOs. Last week (February 5–11, 2018) the amount of funds collected via ICOs equaled $329.3 million. This amount includes the results of the 16 most successful completed ICOs, with the largest amount collected equaling around $104.5 million (Fusion ICO). The average collected funds per project equaled $20.6 million. More detailed information on the main ICOs, including the 16 completed over the past week, is given in Tables 2.2 and 2.3.
Table 2.2. Amount of funds collected and number of ICOs
Table 2.2 shows that the largest amount of funds was collected via ICOs in December 2017 and January 2018. The highest average funds collected per ICO equaled $33.17 million, and was seen in June 2017.
The data for last week (February 5–11, 2018) may be adjusted as information on the amounts of funds collected by completed ICOs is finalized.
Figure 2.1. Trends in funds collected and number of ICOs since the start of 2017
2.2 Top ICOs
Table 2.3. Top 10 ICOs in terms of the amount of funds collected (February 5–11, 2018)
Table 2.3 shows the top 10 ICOs which were successfully completed during the period February 5–11, 2018. The leader for the week was the Fusion project, which planned to collect $42.2 million (51,200 ETH), but actually collected 2.5x more. The tokens were purchased without the performance of KYC procedures, and therefore the shares will be recalculated pro rata to the funds collected, and that part of the funds collected that exceeds the initially announced goal will be returned to contributors. Therefore, technically one can take the view that the amount of funds collected equaled the planned $42 million.
Fusion is a public blockchain intended to ensure network-to-network connectivity and devoted to the creation of an inclusive crypto finance platform that will make it possible to transfer tokens from one network to another and perform their exchange. The special feature of the project is the use of a hierarchical hybrid consensus mechanism (HHCM), which uses PoS consensus at the first level of entry/contract processing, and PoW consensus at the second level.
Figure 2.2 presents the ten largest ICOs completed last week.
Figure 2.2. Top 10 ICOs in terms of the amount of funds collected (February 5–11, 2018)
2.3 Top ICOs in their categories
The list of top ICOs by category is compiled with due account of the categories of the leading ICOs for the week.
Table 2.4. Top 10 ICOs in terms of the amount of funds collected, Finance category
The leader of the week and the category was the Fusion project. The token has already been listed and is being traded on the BiBox exchange (symbol FSN). The price did not fall on the exchange, which is often the case at the start of trading (especially in view of the overall negative market trends), but on the contrary increased and is currently higher than its token sale price (0.0025 ETH).
At present, all projects from the top 10 in the Finance category have a token performance indicator of 0.32x to 7.41x. Half of the projects from the top 10 completed their ICOs in January-February 2018. The KyberNetwork exchange listing can be considered one of the most successful ICOs, as this project has a current token price to token sale price ratio of 7.41x. When considering this indicator, it is important to remember that the KyberNetwork ICO was completed on September 15, 2017, i.e. the 7.41x growth took place over more than four and a half months. The market capitalization of KyberNetwork currently exceeds $375 million.
Figure 2.3. Top 10 ICOs in terms of the amount of funds collected, Finance category
In February the ICOs of three projects that can be assigned to the Content Management category were also completed.
Table 2.5. Top 10 ICOs in terms of the amount of funds collected, Content Management category
From among the top 10 projects in the Content Management category, the Lunyr and Creativecoin projects currently have good token performance indicators. Their market capitalization currently exceeds $41 and $5 million, respectively.
Figure 2.4. Top 10 ICOs in terms of the amount of funds collected, Content Management category
Over the last week (February 5–11, 2018), 16 ICO projects were successfully completed, each of which collected more than $100,000, with a total amount of collected funds of more than $330 million. The leader of the past week was the Fusion project ($104.5 million). The total amount of funds collected by a number of ICOs failed to reach even the $100,000 mark (the information for some projects is still being finalized).
The Glossary is given in Annex 1.
Annex 1 — Glossary