August 3, 2018     Market Update

August 3, 2018 Market Update

 

Over the past seven days, the major story was not in the digital asset markets, but rather the US Equity markets.

Apple, $AAPL, became the first equity with a market capitalization of more than ONE TRILLION Dollars.

To put this in perspective, with the total market cap of the whole digital commodity market at 270 billion dollars,  27% of the Apple share’s could buy every single digital currency, project, token, etc in existence.  Not likely,  just wanted to give a point of reference.

The major story in the cryptocurrency markets, is the continued capital flow into Bitcoin.  The  BTC market share reached an 8 month high and is in the 49% handle.  I touched on the why portions in last week’s blog.  One of the primary reasons for the continued BTC capital inflow is multiple BTC ETF’s in three of the major equity trading regions, US , UK, EU and Asia.

As the BTC “Dominance”  increases, unfortunately this means that more and more of the the dollar pricing of digital assets fall under  Bitcoin Price control.

Now nearly 50% of price movement in digital coins is due to Bitcoin Price.  This creates a situation where the BTC satoshi price decreases and the dollar price is at the mercy of Bitcoin price rising or falling on any given day.

 

Here are a few charts  of the total market:

This is the DX aka the Dollar Index Futures from May 2018 to Present.  This should debunk the theory that the “Strong” Dollar or “Weak” Dollar is having an impact on Cryptocurrency.

 

 

Valuation of all digital currencies, not named BTC .   Only 137 Billion Dollars.  Would you rather have 14% of all the $AAPL shares, or every blockchain project listed on the coinmarketcap website except bitcoin ????  Is this a compelling situation ?  Time will tell.

 

Total Market Cap, One Week

 

Total Market Cap, One Month.  Note the area of interest is right below current prices and this support is the tip of the “v” in the short term “w” bottom

 

Cryptocurrency 3 month total.  Long boring “W” bottom forming.

 

My conclusion, on the equity vs digital asset market:  With the tremendous amount of wealth creation in 2018 in the top 5 NASDAQ equities, and the decline in many of the blockchain assets, as small amounts of investors take profit in some of the largest holdings and re- allocate to blockchain related assets, it will not take very much to send the cryptocurrency markets significantly higher.

I will reiterate this number again:  14% of Apple’s total market valuation is worth more than every crypto project listed on coinmarketcap, excluding Bitcoin.

 

Another comparison I looked at is five of the largest US Equities, Apple, Amazon, Microsoft, Google and Facebook, in total have a valuation of 4.1 TRILLION Dollars.  With just 3.5% of these five companies total market cap they could buy all digital assets excluding Bitcoin.

I believe we are entering a phase in the digital currency markets where large entities are looking for assets that can be used in tandem with their own to help build more efficient commerce.  These large companies have tremendous balance sheets and are not looking at the fractional prices in cents nor in satoshis, rather in much larger multiples.  This goes back to a prior writing about LOG price movements rather than linear price changes.  Network size, security of network, ease of payment, fee structure, will be a few of the keys many of these firms look for.

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