2019 | May // Market Snapshot
Digital Asset Market Update
YTD Performance
BITCOIN
The proxy for the digital asset markets recorded a 50% gain for the month, and a 113% gain YTD, representing a recovery from the 2018 bear market at average price levels near $3,000 to $4,000. Recent price levels settled near the $8,000 mark, with expected volatility ahead.
LARGE CAP INDEX (Bitwise 10)
An index representing the top 10 digital assets by market capitalization trailed Bitcoin marginally through the year. Historically, the diversified index tracked higher due to beta, however, bitcoin dominance prevailed in 2019.
Market Dynamics
WHALE TRADERS
Despite industry developments, the meteoric 80% rise over the last quarter is likely driven by large trades (OTC or distributed). Flash crashes such as the recent Bitstamp trade can be expected to drive volatility until a new equilibrium around current prices stabilizes. The inherent volatility and risk for price manipulation is likely a reason why a broader SEC ETF approval is stalling for what seems like perpetuity.
PRICE PATTERNS
Historically, Bitcoin price spikes are often followed by altcoin rallies. Whereas historically the entire market followed this pattern, the aftermath rally is now limited to higher capitalization altcoins (top-20), representing the sustained flight to quality after emerging from the recent bear market of 2018.
INDUSTRY DEVELOPMENTS
- Institutionals | Fidelity announces digital asset trading service; JP Morgan and IBM launch cross-border digital asset payment solutions
- Market | CME Bitcoin records all-time high BTC futures activity
- Adoption | major retailers Nordstrom, Starbucks, and Whole Foods to accept Bitcoin
- Regulation | SEC issues guidance for virtual currencies and crowdsourced offerings
- Risk | ongoing risks of manipulation and capital flight by unregulated exchanges; major exchange Binance hacked
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