Digital assets continue to consolidate in the upper band of their trading range. The total market cap sixty-day high was set earlier this month just above the 460-billion-dollar mark while the low mark was just under the 250 billion valuation in March. The total cryptocurrency market capitalization now sits at the 400-billion-dollar mark, and over the past month has seen buyers come to market near the 380 level, while profit taking is present in the 460 billion area. In prior updates, I noted as this asset class matures, after large price movements, for the price to become more widely accepted, the currency needs to accumulate volume at or near that price. This allows time for the market to digest the prior price movement and for a smooth change of ownership between past and future investors.
Daily volume in US Dollar over the past week has been stable as well with seven day moving average being 26.6 billion.
Another key factor in gauging the digital commodity market I have reiterated in all of the market updates is the Bitcoin’s percentage of the entire market valuation, aka, Bitcoin Dominance. This number edged up a touch and is currently 36.5%. The all time low in the 32% handle which was set in January of this year will be the next resistance level if the cryptocurrency asset class is to continue its broad based rally. If the digital token market is to reach new all time highs in the near future, BTC dominance will likely be closer to 20%, and as blockchain becomes more well known and used by the masses on a daily basis, Bitcoin Dominance should most likely settle near the 10% mark a few years into the future.
In my opinion, Bitcoin Dominance is truly the best way to describe the BTC relationship to all other cryptocurrencies. I have not found an exchange that does not have a Bitcoin pairing. The name Bitcoin to many not familiar with this asset is synonymous with cryptocurrency, digital commodity, blockchain, etc.
In my decades of watching and involvement in capital markets, it tends to be difficult to be an early entrant in an investment which has had tremendous positive returns and then experienced large scale selloffs. The blockchain industry is reminiscent of how many viewed the internet in the late 1990’s. Many of my friends and colleagues felt that in the mid to late 1990’s the internet was a “bubble.” Twenty plus years later, I would not only say that is totally incorrect, but has become a more important part of everyday life more the majority of the world. Those who were involved early in the tech stock rally of the 1990’s into the year 2000, were rewarded very handsomely. I look back to 1997 when a company went public and was marketing itself as the worlds largest book store. I know many traders who lost large sums of money trying to short this “bubble stock,” by the time it peaked in late 1999 and early 2000, they had no more capital to short it and the great technology stock collapse occurred. This online book store rebranded itself over the past few decades and is now known as Amazon. The point of this story is the parallels I am seeing in the digital currency space. The fact that there are more than 1,600 listed cryptocurrencies makes a very strong statement. Just one year ago, in May 2017, there were less than 800 tokens.
This is a snip from Coinmarketcap.com, from May 14, 2017. I note this currency listed here was at the absolute bottom of the proverbial totem pole, ranked 771 out of a possible 771. With only $300, one could have said they owned twenty billion of a little know cryptocurrency. Granted this coin had a little more than 3 trillion assets outstanding so the whole project was worth a little less than 50 thousand dollars. As luck would have it, this project turned around with the help of a skilled team and some forward-looking vision. One year later this digital coin has not only moved up the ranks but has developed a large community of investors and advocates.
This said investor’s $300 turned into 41 masternodes in the People’s Alternative Choice Project, worth more than $100,000. They also are an income producing asset and yield more than $2,100 each week in $PAC.
This is from Coinmarketcap.com historical data for the old PAC Coin and the total market valuation is listed at 55 billion on that date so we can see the comparison.
Over the exact same time frame the entire digital commodity market moved from 55bb to 400bb.
Below are a few more charts to help illustrate the commentary.
These next two are a NASDAQ 20 year chart and a cryptocurrency chart since a valuation process began.