Information as of January 3, 2018
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 that took place in 2017.
- General cryptocurrency and digital assets market analysis (by quarter, year). Market trends in 2017.
1.1 General cryptocurrency and digital assets market analysis.
Table 1.1. Quarterly trends in capitalization of the cryptocurrency market and the Top 10 cryptocurrencies from January 1, 2017, to January 1, 2018
Over the past year 2017, total cryptocurrency market capitalization increased by nearly $600 billion, from $17.7 billion to $612.9 billion, i.e. by a factor of 34.6 (as of January 1, 2018, 00:00 UTC, see Table 1.1). Figure 1 shows the evolution of the cryptocurrency market during 2017.* Prices and capitalization shown as of 00:00 UTC on the corresponding day
** The change in this indicator over the year was calculated from the time when information on the capitalization of the Bitcoin Cash cryptocurrency appeared (from August 2, 2017).
*** The change in this indicator over the year was calculated from the time when information on the capitalization of the Cardano cryptocurrency appeared (October 3, 2017). Trading commenced on October 1, 2017.
**** The change in this indicator over the year was calculated from the time when information on the capitalization of the IOTA cryptocurrency appeared (June 13, 2017).
Data source: coinmarketcap.com, https://www.smithandcrown.com
Figure 1. Evolution of the cryptocurrency market in 2017 (total market capitalization, USD billion)
Data source: coinmarketcap.com
The growth in cryptocurrency market capitalization was particularly vigorous in November-December 2017, with capitalization exceeding $650 billion on December 21, followed by a slight downward adjustment. The overall growth was driven by the increase in Bitcoin capitalization by approximately $220 billion, from $15.5 billion to $236.7 billion, with the substantial increase in altcoin capitalization by $374 billion, from $2.2 billion to $376.2 billion, accounting for the remaining growth. The total number of cryptocurrencies and digital assets on exchanges increased over the year from 617 to 1,335 (according to the data of coinmarketcap.com), i.e. they more than doubled. Due to the appearance of a large number of competitors (altcoins), the dominance of the main cryptocurrency (Bitcoin) fell considerably over the year, from 87.5% to 38.6%. Figures 2 and 3 show a breakdown of cryptocurrency market capitalization (USD billion) and dominance (%) at the start of 2017 and 2018.
Figure 2. Breakdown of cryptocurrency market capitalization (USD billion) and dominance (%) as of January 1, 2017
Figure 3. Breakdown of cryptocurrency market capitalization (USD billion) and dominance (%) as of January 1, 2018
The structure of the cryptocurrency market changed considerably over the course of 2017, although Bitcoin always remained the leader in terms of capitalization. For the most part, the three leading altcoins held second, third, and fourth place: Ethereum, Ripple and Bitcoin Cash, which appeared as a result of the Bitcoin hard fork on August 1. For example, Ethereum dominance increased from 3.9% at the beginning of 2017 to 27.3% by July 1, 2017, but then fell back to 11.9% by the end of the year, with second place in terms of capitalization being taken over by Ripple, the price of which increased significantly during 2017 (fig. 6).
The Bitcoin price appreciated during 2017 by a factor of 14, from $964 to $14,112. Figure 4 shows the stages of this growth.
Figure 4. Record high Bitcoin prices in 2017, $
Figure 4 shows how the cryptocurrency market reacted to the start of trading in Bitcoin futures on the exchanges of Cboe Global Markets (December 10, 2017) and CME Group (December 18, 2017). Right before the start of trading in futures on the Cboe, the Bitcoin price surpassed several thresholds all at once. It doubled from $9,000 to $18,000 over the course of only two weeks (from November 26 to December 8, 2017). However, a downward adjustment took place over the next two days, with the price depreciating to $13,300-$15,500 by the start of trading on Cboe (December 10, 2017).
Similarly, the Bitcoin price recovered over the week prior to the start of trading in futures on the exchange of CME Group, the world’s largest commodities exchange, and exceeded $20,000 (December 17, 2017), but on the day before the start of trading another small downward adjustment to $18,500-$19,000 was seen by December 18, 2017. After the start of trading in Bitcoin futures on the exchange of CME Group, the Bitcoin price fell over four days all the way to $12,000 (December 22, 2017), but then gradually recovered and was being traded in the range of $12,300 to $16,800 by the end of December.
It can be conjectured that, right before the start of trading in Bitcoin futures (one-two weeks in advance), a fairly large amount of cryptocurrency was bought up to allow the subsequent adjustment of its price. It is also clear that the recognition of Bitcoin as a valuable financial asset and the appearance of the futures had a generally favorable impact on the cryptocurrency market, attracted additional attention to Bitcoin, and led to an increase in demand for this cryptocurrency.
The data given above attest to the high liquidity of the cryptocurrency market and the traders’ readiness for its rapid change in order to profit from short-term changes in exchange rates. At the same time, there are numerous individual traders and very few major institutional players on the cryptocurrency market. However, when these institutional buyers appear, the economics of the cryptocurrency market may undergo significant changes due to the appearance of the new mechanisms of risk hedging (futures contracts), the emergence of high-speed bots that perform transactions in microseconds using developed trading algorithms, and an increase in the influence of financial funds. It is well known that Goldman Sachs, one of the world’s largest finance and investment companies, is already helping its clients to buy and sell Bitcoin futures contracts. Going forward, the number of financial derivatives on the cryptocurrency market will increase, which will attract the large funds and require more clear-cut rules on its regulation.
To analyze trading activity on cryptocurrency exchanges in 2017, the quarterly trends in the prices of the Top 10 cryptocurrencies by capitalization have been compiled (fig. 5).
Figure 5. Quarterly trends in the prices of the Top 10 cryptocurrencies by capitalization, 2017
* The data for Bitcoin Cash and Cardano are given from the start of the fourth quarter, and for IOTA from the start of the third quarter
** The prices are shown as of 00:00 UTC on the corresponding day (Data source: coinmarketcap.com)
The significance of the fourth quarter of 2017 for the cryptocurrency market and its substantial impact on the prices of the key cryptocurrencies can be seen from figure 5. The increase in the prices of the following cryptocurrencies from October 1, 2017, to January 1, 2018, was especially noteworthy:
- Cardano from $0.022 to $0.72 (by more than 32 times)
- Stellar from $0.0135 to $0.36 (by more than 25 times)
- Ripple from $0.198 to $2.300 (by more than 10 times)
Table 1.2 shows the calculations of the quarterly trends of the cryptocurrency market and the Top 10 cryptocurrencies by capitalization from January 1, 2017, to January 1, 2018, in percentages. The figures in US dollars from Table 1.1 were used as a basis.
Table 1.2. Quarterly trends of the cryptocurrency market and the Top 10 cryptocurrencies by capitalization from January 1, 2017, to January 1, 2018 (as a %)
Many media outlets have repeatedly called 2017 the year of the cryptocurrency. Indeed, the growth in the prices of the Top 10 cryptocurrencies by capitalization reached surprising record highs (see fig. 6). For example, the Ripple exchange rate increased over the year by 35,160%, from $0.006523 to $2.30, i.e. an increase 352.6x. The growth in prices during Q4 2017 is shown in fig. 7.
Figure 6. Record growth in prices of the Top 10 cryptocurrencies by capitalization during 2017 (USD), %.
Figure 7. Record growth in prices of the Top 10 cryptocurrencies by capitalization during Q4 2017, %.
Table 1.3 shows the key events of 2017 having an influence on the prices of the dominant cryptocurrencies and on the cryptocurrency market in general, with an indication of their nature and type of impact.
Table 1.3. Key events having an influence on the cryptocurrency market in 2017
Table 1.4 gives a list of events, information on which could impact both the prices of specific cryptocurrencies and the market in general.
Table 1.4. Events that could have an influence on cryptocurrency prices (the cryptocurrency market) in 2018
- General analysis of the ICO market during 2017.
2.1 Brief market overview (important events during 2017)
- 2016: The Year Blockchain ICOs Disrupted Venture Capital [source: Coindesk
- Watch Out — The ICOs Are Coming [source: Coindesk]
- CoinDesk Research: Speculation Driving Boom in Blockchain ‘ICOs’ [source: Coindesk]
- Investment Firm Blockchain Capital is Launching a $10 Million ICO [source: Coindesk]
- Blockchain Capital Raises $10 Million ICO for VC Startup Fund [source: CCN]
- ICO Insanity? $300 Million Gnosis Valuation Sparks Market Reaction [source: Coindesk]
- Blockchain Asset Fund TaaS Raises $7.7 Million Through ICO [source: CCN]
- Ethereum-Based Aragon Raises $25 Million Under 15 Minutes in Record ICO [source: CCN]
- Investors Rush and Crush to Buy $36 Million Ethereum-Based BAT ICO [source: CCN]
- Pantera Capital to Raise $100 Million for ICO Fund [source: CCN]
- $7 Million Lost in CoinDash ICO Hack [source: Coindesk]
- ICO Mania: $1.2 Billion Raised in 2017, $600 Million in the Last 30 Days [source: CCN]
- Filecoin Presale Raises $52 Million Ahead of ICO Launch [source: Coindesk]
- The World’s First Government ICO: Estonia Could Offer Its Own Token [source: CCN]
- $257 Million: Filecoin ICO Shatters Crowdsale Record [source: CCN]
- Kik ICO Raises $98 Million But Falls Short of Target [source: Coindesk]
- Vitalik Buterin is Against Many Open-Source Ethereum Scaling Projects Conducting ICOs [source: CCN]
- A ‘Real Bubble’: Warren Buffett Not Impressed by Bitcoin Price Surge or ICOs [source: CCN]
- Tezos Founders Face Second Class Action Lawsuit Over $232 Million ICO [source: CCN]
- Tokenized Fund-of-Funds to Raise $100 Million Via ICO [source: Coindesk]
- SEC Files Fraud Charges Against ICO Organizer [source: Coindesk]
- Belarus Legalizes Cryptocurrencies, ICOs and Smart Contracts [source: CoinSpeaker]
2.2. Aggregated trends and performance indicators of past (completed) ICOs
A set of tools is proposed to assess the trends and performance of successfully completed and/or listed ICOs (see Table 2.1).
Table 2.1. Tools to assess the market performance of successfully completed and/or listed ICOs
Table 2.2. Aggregated trends and performance indicators of past (completed) ICOs4 in 2017
The data since the start of 2017 were adjusted to account for the appearance of more complete information on past ICOs. In all, the total amount of funds collected during 2017 equaled more than $6 billion (the funds collected through 382 ICOs were taken into account). During the fourth quarter of 2017 the amount of funds collected via ICOs exceeded $3.1 billion. This amount includes the results of the 196 most successful completed ICOs, with the largest amount collected equaling approximately $258 million (Hdac ICO). The average amount of funds collected per project was $16 million. More detailed information on the main ICOs of the past year is given in Table 2.3.
2.3. Quantitative analysis of the ICO market
1.Amount of funds collected and number of ICOs
Table 2.3. Amount of funds collected and number of ICOs
Table 2.3 shows that the greatest amount of funds was collected via ICOs in June and December 2017.
Figure 2.1. Trends in funds collected and number of ICOs since the start of the year
2. Quarterly Top ICOs in 2017
Table 2.4. Top 10 ICOs in terms of the amount of funds collected, Q1 2017
Table 2.4 shows the top 10 ICOs which were successfully completed during the first quarter of 2017.
At present, the token performance indicator for all projects in the Top 10 range from 0.73x to 101.85x. One of the most successful ICOs in terms of the amount of funds collected was the ChronoBank project, and one of the most successful exchange listings was the Augmentors project, as this project has a current token price to token sale price ratio of 101.85x. When considering this indicator, it is important to remember that the Augmentors ICO was completed in February 2017, i.e. the 101.85x growth took place over approximately 10 months.Figure 2.2 presents the ten largest ICOs completed from January to March 2017
Figure 2.2. Top 10 ICOs in terms of the amount of funds collected, January-March 2017 (Q1)
Table 2.5. Top 10 ICOs in terms of the amount of funds collected, Q2 2017
Table 2.5 shows the top 10 ICOs which were successfully completed during the second quarter of 2017.
The leader in the amount of funds collected was the EOS project. The highest token performance, i.e. the best current token price to token sale price ratio, is 16.25x and belongs to the Status ICO. Its current market capitalization equals around $2 billion.
Figure 2.3 presents the ten largest ICOs completed from April to June 2017
Figure 2.3. Top 10 ICOs in terms of the amount of funds collected, April-June 2017 (Q2)
Table 2.6. Top 10 ICOs in terms of the amount of funds collected, Q3 2017
Table 2.6 shows the top 10 ICOs which were successfully completed during the third quarter of 2017.
The leader in the amount of funds collected was the Filecoin project. The highest token performance, i.e. the best current token price to token sale price ratio, is 62.14x and belongs to the ICON ICO. Its current market capitalization equals around $2.7 billion. Figure 2.4 presents the ten largest ICOs completed from July to September 2017
Figure 2.4. Top 10 ICOs in terms of the amount of funds collected, July-September 2017 (Q3)
Table 2.7. Top 10 ICOs in terms of the amount of funds collected, Q4 2017
Table 2.7 shows the top 10 ICOs which were successfully completed during the fourth quarter of 2017.
The leader in the amount of funds collected and the most successful ICO in the history of holding ICOs was the Hdac project. This project surpassed the well-known project Filecoin, which was previously in first place by amount of funds collected, by $1 million.
Hdac is an abbreviation for Hyundai Digital Asset Currency. This is a hybrid project that creates a huge, constantly developing information platform based on blockchain and the Internet of Things (IoT). This project offers an ecosystem with public and private keys for interacting with the devices around us, the number of which will continue to grow (smart homes, smart cars, smartphones, smartwatches, televisions, refrigerators, gas stoves, teapots, etc.). The configuration of Hdac creates a reliable, confidential, comprehensive, and controllable system of communications, which will make it possible to perform quick transactions, and increase the convenience of all types of payments: taxes, settlements with clients, investments, loans, etc. Figure 2.5 presents the ten largest ICOs completed from November to December 2017
Figure 2.5. Top 10 ICOs in terms of amount of funds collected, November-December 2017 (Q4)
3.Top ICOs since the start of 2017
Table 2.8 shows the top 10 ICOs in terms of the amount of funds collected in 2017, most of which belong to the Infrastructure category.
Table 2.8. Top 10 ICOs in terms of the amount of funds collected in 2017
Figure 2.6. Top 10 ICOs in terms of the amount of funds collected in 2017
Over the past year 2017, 382 ICO projects were successfully completed, each of which collected more than $100,000, with a total amount of funds collected of at least $6 billion. The leader of the year was the Hdac project ($258 million).
The Glossary is given in Annex 1.