Crypto Market Update 07.23.2018

Crypto Market Update 07.23.2018

Our weekly crypto market update uses a standard set of information sources in an effort to get a less biased opinion of the market. 

 

CRYPTO INDEX PERFORMANCE

The Bletchley Indexes “offer the most thoughtful and consistent approach to index construction” according to CoinMetrics. 

Original “top X” indexes were launched in June 2017, followed by a market-wide index in December 2017 and sector specific indexes in February 2018. In total, there are 13 Bletchley indexes, with charts over various timetables available for each on their site.

Below is an alternate view of the performance based on the downloadable data made available by Bletchley. This view is intended to give a side-by-side snapshot of a handful of indexes.

Bletchley Crypto Indexes Performance 07-23-2018

Observations

  • Total market index up nearly 10% in past week
  • All indexes underperformed vs BTC over last 30 days, while mostly positive vs USD

 

Global Crypto Charts

For a quick look at the global markets from another perspective, Coinlib.io provides simple charts with a lot of info, including Bitcoin marketshare, a visualization of the top 20 currencies by volume and market cap, and more.

Total Market Cap of Cryptocurrencies: $287.87 billion  ( up from $262.05 billion 1 week ago)

crypto total market cap 07.23.18

Market Share of Top Cryptocurrencies

Top 5 cryptocurrency marketshare 07.23.2018

Bitcoin’s market share is up to 44%, up from a low of 34% in early May.

Market share of top 20 cryptocurrencies

Top 20 cryptocurrency marketshare 07.23.2018

The top 20 currencies (by market cap) currently make up roughly 89% of the total crypto market share.

TradingView Technical Indicators

Based on data and info from TradingView (Click  for 30% off a pro subscription)

crypto tradingview technical signals 07.23.18

Scores based on the cumulative total of positive and negative technical indicators signals over three time horizons on Trading View. Scores are weighted by multiplying total as follows: daily (x 1) weekly (x 2), and monthly (x 3). 

  • BTC has improved significantly vs last week
  • ETH has turned more negative

 

CRYPTO PERFORMANCE

Crypto Performance 07.23.2018

  • BTC/USD up over 16% over last week, over 20% in last month
  • ETH up slightly (3%) vs USD over last week

 

Google Trends

 

Google Trends Bitcoin + Crypto 07-23-2018

Google Trends showed a slight, brief uptick last week amid coinciding price surge.

WooBull Charts

Bitcoin NVT Ratio - 07.23.2018

NVTRatio –  179 – This long-term cycle tracking ratio has mostly sideways over the last few months and remains at a very high level, suggesting a “high speculative value.”

Bitcoin NVT Signal Chart 07.23.2018

NVT Signal -This short-term signal has spiked to 145, up from 118 a week ago.

In the original post introducing NVT Signal, 150 was indicated as an overbought signal.

While the short-term trend may continue upward, the 145 signal indicates a correction in price may be coming.

CoinMetrics Charts

CoinMetrics has provides great charting tools for a number of top cryptocurrencies. Kalvichkin’s NVT is a regular check for checking short term trading signals. 

Kalvichkin's NVT - BTC ETH 07.23.2018

Kalvichkin’s NVT – Kalvichikin’s NVT has moved sideways recently, similar to NVT Signal. This remains at a very high level historically.

Articles of Note

 

— Is Mastercard getting ready to offer a crypto-backed credit card?

“MasterCard has moved one step closer to developing a cryptocurrency-backed credit card”

Crypto Credit Card? MasterCard Wins Blockchain Payments Patent
Sam Bourgi Hacked: Hacking Finance

“According to the filing with the U.S. Patent and Trademark Office, MasterCard has received the green light to develop a proprietary method for “managing fractional reserves of blockchain currency.”

How is crypto changing the art world?

“Whether driven by fintech or funds, today’s finance-driven art world makes it quite easy to forget that” in the center of it all is artists

How Financial Products Drive Today’s Art World
The New York Times

“But the challenge for tokenization ventures such as Look Lateral is finding works of art of sufficient quality to hold their value after being exposed to fractional trading. The art market puts a premium on “blue chip” works that have not been overtraded, and these tend to be bought by wealthy individuals, not by fintech start-ups.

 The Case For Financial Business Documents as NFTs

‘To paraphrase Naval: “The internet gave us digital ubiquity. Blockchains now give us digital scarcity.”

Business NFTs – Financial Business Documents As Tokens On Decentralized Networks
Medium

“For example, invoices and purchase orders originate in a digital financial system and are processed in many other systems during the lifecycle of each set of data. As with the digital version of a song the problems of duplication, verification of document authenticity, or tracking of “ownership” (e.g. who should receive the money when an invoice finally gets paid) are very real challenges. We are not even scratching the surface of creating traceable, unique, certifiable derivative documents (the “mixes” of different information) based on today’s documents of the Financial Supply Chain.

– Investor Mike Maples Jr on how crypto will be no different than other forms of investing, with the biggest winners being the most patient.

“Mark my words: Slow Money founders, builders, and investors will be the biggest winners in crypto”

Slow Money Crypto – Mike Maples, Jr. – Medium
Medium

““Slow Money” investors treat the market like it is a weighing machine. They try to make money by owning a part of a great business that will appreciate faster than the broader market over a very long time. Liquidity matters less to such investors because they might hold for decades.

– On how blockchain can create new decentralized businesses through double network effects

“How businesses built around network effects are about to undergo a radical transformation that will impact us all”

The Future Of Network Effects: Tokenization and the End of Extraction
Medium

“Together, these factors suggest that network effects businesses of the future will be organized not as centralized for-profit corporations built on extractionary business models, but rather as decentralized token-based economies with incentive alignment between network owners and participants.

— Cuy Sheffield lays out his vision of how NFTs may develop into a multi-billion dollar market by bringing digital scarcity to e-sportsNFTs

“there is the potential for NFTs to become a multi-billion dollar market in the next few years”

NFTs and the Future of Digital Memorabilia – Hacker Noon
Hacker Noon

“I’m excited about the potential of the intersection of eSports and non-fungible tokens (NFTs) to create a new digital economy of cryptogoods and digital memorabilia that could become one of the first mainstream uses of cryptoassets.

 

Look longterm for crypto investments

There’s a possibility that some big winners come out of the crypto projects. Sure, most are junk but like the tech boom, a few big winners may emerge. There’s a lot debate about how to value crypto assets. Most of that pertains to assets that are being used as intended now.

With many projects either not yet active, or still in the very early stages, any valuation based on data or metrics seems unlikely to be accurate. Investments need to be longterm, as Jeremy Epstein writes in How do you value crypto-assets? at Never Stop Marketing

if you are serious about profiting from this long term trend towards blockchain-based ownership of assets that will have value within decentralized networks, then the smart move is to ignore the short-term crypto mania and use this time to go as deep as you can on the fundamentals.

Do what you can to understand HOW a crypto-network is put together and how it will work. If you are about to make an investment, find someone who has really done his or her homework.

As an example of someone that’s done their homework, he cites the Store of Value blog.

Using crypto to pay viewers & other new business models

Jeremy Epstein looks at how Amazon is integrating advertising into their streaming video service, and how it could be applied to crypto-enabled business models of the future:

Let’s leave aside the legitimate fear that now Amazon has even MORE information about you, locked away in proprietary databases, and can manipulate you at will since who cares about that anyway, right?

What Amazon is now doing, better than anyone in the history of TV has ever done, is tie content viewing directly to revenue.

For every show you watch, intro you skip over, episode you quit halfway through…every single click, you are going to earn some sort of crypto-token for it.

That’s right, you will get paid to watch TV. (That’s all we need, right? At least my kids can become revenue generators now.)

Vendors will run AI algorithms on all of the data that you (and others) generate and serve even more relevant ads based on your viewing habits.

You’ll get your content for free and you will get paid to watch it.  Then, you’ll use those crypto-tokens to buy the products that advertisers put in front of you (which is paid for in the same crypto-tokens), all part of the circular economy.

It likely won’t be Amazon that will find a way to pay you, as they’ve shown they are happy to keep your data in exchange for finding ways to sell more, but there are new business models, made possible by crypto and blockchain.

via Amazon Shows How You Will Get Paid in Cryptocurrency to Watch TV at Never Stop Marketing…

Crypto: Will there be real developments in 2018?

It is not easy to keep an eye on the “long game” during periods of mania like the one we are experiencing. The attention of the world is on the currencies, but people like CNBC are missing the point. The bulk of the iceberg lies below the water. The same is true with crypto. That is where you should keep your eyes as well.

via 2018: The Year the Crypto Sh*t Starts Getting Real at Never Stop Marketing…

You can’t “blockchain” everything

Matt Levine on the “blockchain” projects attempting to adopt to real world, which doesn’t function as neatly as needed. Blockchain opens up a a lot of new possibilities, but you can’t simply port physical businesses to a blockchain. New models are needed in some cases, and in most, blockchain isn’t the answer.

Levine, of course, references “tech” company Juicero:

You might call this the Juicero Problem: You can build a computer ecosystem and associate it with bags of fruit, and encourage people to use the computer ecosystem to squeeze the bags of fruit, but not everything that happens to the bags of fruit in the real world can be completely controlled by your computer ecosystem. You can’t prevent people from squeezing the bags with their hands. The world exists, and it is messier than your protocols want it to be.

via The Blockchain Is Not the World at Bloomberg

Using blockchain technology to more accurately measure value

in any transaction, you want to maximize across a few vectors: value for your customers value for your partners (and employees) value for society value for the planet today value for the planet tomorrow …and probably more

via How Blockchain Technology Can Help Measure Value at Never Stop Marketing…

Blockchain Based AI is Coming

As Deepak Dutt, CEO of AI-based identity proofing company Zighra says, “When data is commoditized, AI algorithms become the most valuable part of the ecosystem.” In other words, we’ll see a power shift from those who own big sets of data to those who build smart, useful algorithms. That’s great, but if we’re moving data to blockchains, some big, thorny questions still exist. For example: Where does the data go? How is it discovered and utilized? Why would people put their data in there? And don’t the “big guys” still have a huge advantage in terms of building powerful AI? Welcome to the world of Blockchain+AI

via Why you want blockchain-based AI (even if you don’t know it yet) at Never Stop Marketing…

Examples of implementing blockchain technologies

Jeremy Epstein lays out how blockchain technologies can be utilized in two great, simple examples. In the first example, he shows how a smart contracts could be used for a SEO marketer:

In a smart contract, we set up the rule that says, “if the result for search term ‘blockchain marketing,’ goes to Never Stop Marketing on May 21, then pay Sandy 2 Bitcoin. If not, only pay .5 BTC”

We might agree that we will use the .json feed from Google (called an “oracle”) to serve as the arbiter and then, we would both sign it with our unique cryptographic signatures.

I would put the 2 BTC into an escrow account for payment.

Then, we let it run.

On the prescribed date, the contract queries Google, sees the result and the appropriate amount is released immediately (or not, if it fails). Either way, the contract is recorded in a blockchain and open to verification (here’s one I ran).

Done, basically no friction or time delay. The provider of the service, in this case, SmartContract gets a transaction fee of .0001 BTC.

And in his second example, he shows how a decentralized rideshare app could help users capture the value created by usage:

Riders need Zoozs in order to pay for rides. Drivers accept Zoozs in return for rides.

As there is a finite number of Zoozs-or a predictable inflation to it based on the protocol rules- (though they are digital so they can be cost-effectively sliced into multiple decimals), the value of each Zooz increases as the demand for them increases.

Let’s think of it this way and keep it very simple.

There are 100 Zoozs out there.

Each one is worth $1.

There are 100 network participants. 50 drivers and 50 riders.

Each ride costs 1 Zooz.

As word gets around that La’Zooz is cheaper than Uber, more people want Zoozs. So they trade their dollars or Bitcoins for Zoozs which increases the price of a Zooz to $2. So now, everyone who has a Zooz has $2 worth of value instead of $1.

The purchasing power has doubled, so you can afford 2 rides for 1 Zooz instead of 1. So you sell half a Zooz to someone who needs one, keeps the Zooz you want for buying rides and get the profit from the other one.

The drivers who were charging 1 Zooz now see the value of the ride they gave in the past go from $1 to $2 (retroactively) and are more inclined to accept Zoozs because they expect more people to join the network. In effect, by taking these tokens, you are getting value today AND getting value in the future.

Instead of Uber capturing the value that accrues, the owners of the network (the token holders) capture the value. Whoa!

 

Amazon’s growing competitor list may be a problem

From Michael Coren at Quartz on the history of competing with so many companies, as Amazon does:

Perhaps no other company in history has sold so many different products (354 million) while competing against so many other companies (hundreds). In the past, that power hasn’t lasted. Amazon is betting it will be different.

On how it’s worked in the past:

General Electric (GE) fell into this trap after World War II. As GE brought hundreds of industries under its roof, the company’s stock began to track US booms and busts. Today, analysts compare GE’s portfolio of business from jet engines to oil-field safety valves to an actively managed mutual fund—and one that doesn’t beat the market. Since the mid-1940s, the $181 billion conglomerate has barely outperformed the S&P 500. Almost all of its standout performance came during the 20-year tenure of CEO Jack Welch in the 1980s and 1990s–a management feat that hasn’t been repeated.

Amazon has a nearly unprecedented advantage and that may be damaging in the long-term:

Modern antitrust theory, rooted in the ideas of “consumer harm” from monopolists’ high prices, misses the threat posed by Amazon, Khan argues. The structural advantages Amazon wields over competitors gives its the ability to price products below cost and restrict access to customers. Over time, Amazon’s stranglehold on the market may degrade product quality, variety, and innovation, and enable exploitive pricing after competitors are eliminated.

While they don’t fit the classic definition of a monopoly, Amazon is aware trouble may lie ahead and is prepared:

The company’s lobbying budget ballooned to $11.4 million in 2016, a six-fold increase over 2011, reports the Washington Business Journal. Amazon now retains at least 77 lobbyists, two of them former heads of the Department of Justice Antitrust Division during the Obama and George W. Bush Administrations, brought on to help ensure the Whole Foods acquisition.

Maybe it’s different this time, or perhaps Amazon will someday be unseated by the likes of OpenBazaar or another blockchain enabled marketplace.

 

Cowen & Levine on Where Tech Will Take Finance

Two of my favorite writers discussed where fintech is headed.

From Matt Levine:

The point of most innovations in consumer finance has been precisely to reduce its presence in our lives: Instead of talking to a bank teller to get money, you use an ATM. Instead of physically walking into a broker’s office to talk about which stocks to buy, you buy index funds through a web page. Or, now, you click to enroll in an app and it does all of your asset-allocating and stock-picking and tax-harvesting and so forth for you. I think that a lot of financial technology is heading in the direction of perfecting that vanishing act, so that in 20 years you’ll just think about financial things less than you do now.

Really ambitious proponents of blockchain technology, though, envision a world in which a lot of identity information — your citizenship and marital status and college degrees and employment and certifications and whatnot, maybe your fingerprints and retinas and DNA, as well as of course your credit information — are encoded on a blockchain and used in every aspect of your life.

And from Cowen:

Perhaps I expect bigger changes than you do, so let me follow up on a few possible future scenarios. Here’s one to start with: Big data and algorithms will become so good that only the good credit risks will be able to borrow. Of course this will help many creditworthy people, but the social-insurance function of credit might disappear with large numbers of risky borrowers locked out of the loan market and perhaps some insurance markets too.

 

Levine is, as usual, quite level-headed about new developments and seemingly prepared to be underwhelmed. Cowen sees bigger potential problems, which he’s also wont to do.