January 5, 2018   Market Commentary

January 5, 2018 Market Commentary

During the holiday season, the majority of global assets rose significantly.  The block chain sector was relatively unchanged, while Bitcoin was down, the capital flowed into other Mega Cap crypto currencies.

I mentioned in many of my earlier pieces the importance of BTC total market share decreasing for a broad based rally to occur.

As of this writing Bitcoin represents just over half of the total market cap for the Coinmarketcap.com digital asset index.

 

I have compared the block chain index to the NASDAQ many times, and will bring it up once again.

Bitcoin is 51% of the total market cap for exchange listed Digital Projects and Currencies.

The NASDAQ 100 has 38% of its market cap comprised of the four companies listed below.

Microsoft  10%

Amazon 10%

Google 9%

Apple 9%

 

With more than 50% of the price of almost all digital assets being dictated by Bitcoin’s US Dollar value,  the great majority of projects no longer control their own destinies and futures.  Half of the industry’s valuation is controlled by the Bitcoin market making algo’s.

This thought has been re-entered my mind many times over the past few years. I have seen BTC market share move from 85% down to 32% and has since had a valuation in the middle of that range.  I would urge you to look at BTC Dominance over the past few years and compare how the overall market performed.  Bitcoin was the first, and always will be.  The name will be synonymous with block chain and crypto currency.  Ultimately it will be up to investors to decide how all of this plays out.

 

Bitcoin’s  Market Share of Total Digital Asset Market from Coinmarketcap.com

 

For this year end piece, I added a few more assets than normal, to help illustrate my point.  During my Wall St. career, especially since 2008, the funds and managed money I have dealt with have US Equities front and center.  During November and early December, the indexes were under severe pressure, and this puts risk managers on alert.  I have seen and heard many instances over the years where guys just need to get out.  Pulling the rip cord button as some say.  All the assets that a manager is  running  are bought and sold with market orders to get flatten positions and re-evaluate the situation.  This appears to be what we saw in the digital asset markets in early December, as there were a few days where mega cap digital asset spreads simply imploded.

 

That said, as Equities caught a bid, you will note similar patterns in many different assets and investments which one may not often finding moving in the same direction.

 

 

S&P 500 Futures

 

 

NASDAQ 100 Futures

 

 

NYMEX Crude Oil Futures

 

 

Gold Futures, A Global benchmark

 

 

US Ten Year Treasury Futures, A global benchmark

 

 

Silver Futures, the #2 Metal behind Gold

 

 

 

Ethereum, (ETH), the #2 project behind Bitcoin

 

 

Platinum Futures, (someone eventually saw some value trading under $800 !!)

 

 

Litecoin, (LTC),  As luck would have it, the aggressive Litecoin buying coincided with the Platinum buyers

 

 

The next charts may be a little surprising

 

 

Bitcoin, (BTC), The digital asset benchmark, Down slightly over this time period

 

 

US Dollar Index Futures, The Global Currency Benchmark, Also down slightly over this time period

 

Coinmarketcap.com total Digital Asset Index market capitalization, Flat over this time period as money moved from BTC to other project’s and currencies

 

I hope these charts illustrate how some assets in far different classes often have very similar patterns.

 

I wish all of you a Happy New Year and wish you the best in all of your endeavors in 2019.

 

 

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