Q1 2018 Crypto market review: the market rises and falls
The first quarter of 2018 turned out to be difficult for cryptocurrency investors. We saw a steep fall of all popular currencies. Investors got used to the constant growth of this recent market without serious backlash, but it should be realized that this never happens. Any market is a meeting of sellers and buyers, serious imbalances lead to a significant shift in price.
A decline is absolutely normal for any market. Unfortunately, we can not refer to the long history of the cryptocurrency market, because it simply does not exist. But let’s look at the history of “stable” classical markets in different countries of the world. What were their maximum declines?
Consequently, all markets in different times experienced the extreme falls to -98%. Even the ‘cozy’ Switzerland once lost up to 73% in the capitalization of its stock market. It is noteworthy that all markets were then restored and grew. The crisis passes, and the economy develops further. We can also notice that many of the falls occurred during the years of war.
The current situation on the cryptocurrency market can also be compared to war. Cryptocurrencies try to fortify their positions, they do not have a technical infrastructure, legislation, and for most of the world’s population, cryptocurrencies are confusing from a technical point of view. All these factors influence and, as a result, we have the highest market volatility. The rate of most altcoins can be compared to the roller coaster, one day we see a growth of 200%, and the next day the same cryptocurrency falls by 60%.
Cryptocurrency in the first quarter
Let’s consider the actual data of the cryptocurrency market. To begin with, look at the change in capitalization:
Capitalization of the market in late 2017 amounted to $ 619 billion. On January 7, 2018, was the peak of capitalization of $ 835 billion. At the end of the quarter, capitalization fell to $ 262 billion, not far from the minimum period indicators. The minimum for this period is $ 251 billion.
Max drawdown for the period
251/835–1=-69.9%
The change for the period
262/619–1=-57.7%
Dynamics of the TOP-10 cryptocurrencies for the first quarter. Leaders at the end of 2017:
On the average, we see a decline of more than 60%. It is also worth noting that two cryptocurrencies NEM and Dash went out of the TOP-10 in the end of the quarter, NEO and EOS took their place. It is worth paying special attention to the two new leaders, since they have a good potential in 2018.
The TEOZ Fund token
The price of the fund’s token has decreased along with the entire market. At the end of 2017, the price of the token was $ 3.42. The quarter was completed at $ 1.6. Thus, the fall is 53.2%. This is less than the fall in capitalization by 57.7% and the average drop in top-level cryptocurrencies by 64.2%. A wide diversification of the portfolio helped to reduce the losses.
The TEOZ fund compares its performance not only with the dynamics of capitalization and top-level cryptocurrencies but also with indices. We compare ourselves with the Crypto20 index and the Blockchain Index from Iconomi.
Crypto20 started trading only on January 22, 2018, so we will take it for comparison in our future reports. The Blockchain Index for the first quarter of 2018 changed by -54.4%. The position of the TEOZ token is 1.2% better in absolute terms. At a distance, even insignificant advantages in profitability will have a strong influence on the final results.
The ICO market
Many experts predicted the decline of the ICO era in 2018, but in fact, there is another picture. The volume of ICO investments is steadily growing. We agree only that many ICO projects will disappear from the market after a few years, but tens and even hundreds will remain and grow many times. Let’s look at the statistics:
Already in the first quarter of 2018 ICO collected 1.5 times more than for the entire 2017. We expect further development of this method of modern projects financing. A convenient and cross-border way of attracting investments will continue developing.
Why is it worth investing now?
We expect careful regulation of the industry
In our Weekly Updates, we always separately consider the situation in the sphere of cryptocurrency regulation. It is worth noting that most countries take an observational position and develop rules for regulating this industry. Here are just some of the news headlines from recent reports:
- The Commodity Futures Trading Commission establishes two committees: a cryptocurrency one and on the application of blockchain technology in the field of finance
- Gibraltar announced plans to legalize ICO
- Venezuela sold the national cryptocurrency for $ 735 million
- The German Ministry of Finance announced that purchases for cryptocurrencies will not be taxed
- SEC wants to restore order to ICO
- South Korea may allow ICO but will regulate them
- At the G20 summit, the сryptocurrency regulation was discussed
You can follow our Weekly Updates for other key regulatory developments. We can say for sure that since the advantages of cryptocurrencies and the possibility of careful regulation are being discussed at the national and international level, it means the gradual acceptance of cryptocurrencies throughout the world. Now large institutional players can not physically invest in cryptocurrencies since there is no legislative base and no infrastructure for this.
Regulators from all over the world are now working out their own standards for regulating the industry. It takes time to create the rules of the game. Infrastructure is also gradually being created. As early as 2017, futures for bitcoin were issued, and investors were able to invest in them. Now the SEC is considering applications for bitcoin ETF.
The fall of the market is a great chance for an investor to buy at a low price
The cryptocurrency fund TEOZ shifted a classical approach to investments and modernized it for the cryptocurrency sector. We can share one valuable secret of the long-term success that investors around the world have been using for many years.
The secret is simple — invest in the market gradually, at regular intervals and approximately the same amount.
The positive experience of this method is that for the same amount of money you buy a different amount of asset. For example, you decided to invest $ 1000 per month in crypto. If at the beginning of the period bitcoin would cost $ 1000, then you would buy 1 BTC. If in the second month its price had risen to $ 2,000, then you would have bought only 0.5 BTC. And if in the third month the price drops dramatically and reaches $ 500, then you can replenish your portfolio immediately by 2 BTC.
Let’s see how such a strategy would work from 2016 to March 2018, providing $ 100 investment only in bitcoin.
With this strategy, you would have invested $ 2,700 in 27 months. At the same time, your profit would be $ 16509.2. The strategy of regular investments in a diversified portfolio shows the best results in the long term. We do not recommend investing only in bitcoin, but rather in a broad market portfolio. In this case, the Teoz Fund token is just right.
The cryptocurrency industry has huge growth prospects in the coming years. Those who can outwait the current downturn and add funds to the portfolio in their investment plan, after several years will increase their capital several times. Do not succumb to the market panic, diversify your investments, develop a financial investment plan and follow it. In a few years, you will be surprised at how much you managed to earn thanks to strict financial discipline.
Russian version: https://goo.gl/dvu1VL
TEOZ fund is an index fund created by financial market professionals with an in-depth understanding of the crypto industry and an underlying blockchain technology.
Don’t want to lose an opportunity to earn money with cryptocurrency?
Invest in cryptocurrency growth with a yield of 200% per quarter on https://teoz.fund/
Subscribe to our Telegram channel and don’t miss any peace of content.
