The past week was relatively quiet across all major asset classes.
Equities were slightly lower, hence the VIX was slightly higher.
Cryptocurrencies were relatively unchanged, (Nope, this is not a typo.)
Gold edged lower, while Eurodollar rates, for the first time in many months were slightly lower.
Bitcoin continued it multi month trend of adding market dominance in the cryptocurrency space increasing to 41.5% which is yet again another 5% increase. The total Digital Asset market cap remained right around the 460-billion-dollar valuation.
Bitcoin was up early 10%, while the broader market was nearly unchanged, hence all cryptos not named BTC were down slightly.
Since this week was relatively quiet across the board, I took some time to do some historical data research and look back in time at the performance of the young cryptocurrency market and also spent some extra time looking over social media to see the energy of some involved in the cryptocurrency space.
My observations intrigued me, as it seems many watch an asset go up and are not involved and then call it a pump, yet only hours or days later, if the entity is lower in price they cry that it is a scam, as they did not participate on the way up, and have incurred a small financial loss.
I thought the cryptocurrency market performance on a longer-term horizon would be a good topic for today’s market Update.
1bb=1 billion for those who may not be familiar with the term.
The Digital Coin Market Cap has risen from 24 Billion Dollars One Year Ago, to 468 Billion Dollars today. A modest 1900% return in one year.
April 2017, the total Market Cap crossed 30bb for the first time.
May 2017, Total Crypto valuation rose above 50bb.
June 2017, Crypto’s rose above 100bb.
November 2017, another historic high, rising above the 200bb mark.
January 2018, digital coins as a whole were valued in excess of 815 billion dollars.
Now let’s look at the entire Cryptocurrency Market minus BTC.
The market for all things not Bitcoin increased from 3.7bb last March to 266bb at the time of this writing. A moderate 7200% return.
Here are some numbers:
March 2017 3.7bb
April 2017 Surpasses 10bb
May 2017 20bb for first time
June 2017 50bb
Nov 2017 100bb mark attained
January 2018 The Crypto World (Less Bitcoin,) has a valuation of 546 billion dollars
So, from March 2017 to January 2018 all coins not named Bitcoin increased more than 14,000% …. Yet many are not satisfied ????
I looked on numerous social media sites and apps to see what many had to say on the space from small coins to Bitcoin and everything in between. It was shocking at how little gratification many investors had with these returns. That said, I do not think there is a high probability that many own each and every coin in existence, and it appeared many were simply on the chats in exchanges, discord, twitter, reddit and many others asking what they should buy.
I do not believe anyone has the answer to that, only the person who is actually making that transaction. I was taught to do some due diligence on every investment I allocate capital towards, find out what I like and don’t like and then to either invest or not invest based on my opinions and data and research.
I learned a tremendous amount on Wall St. and very rarely were the funds and managers who were making huge returns boasting about it, but often times those in a trade which was losing were always looking to blame someone or something else.
Here are a few of the questions I heard many a risk manager asks the lead trader or fund manager when things started to have negative returns.
- Why do you have this position on the books?
- If you hesitated or delayed, and did not have a quick accurate explanation, you were in deep shit.
- Are you comfortable with this position?
- If yes, you probably bought yourself some time, but they want an exit plan for both and upside and downside move.
- If you had no position right now, would you still put this same position on?
- If you answered No, you may be walking out the door permanently
The overwhelming observation is that many have an excuse on why they lost, most of which are blaming someone or something other than themselves.
In every investment I have ever made, I was always the one who made a phone call or clicked the mouse or hit the screen on my app, not someone else.
So, its comical yet sad that the social media space has so many that seem to be “traders” but also seems the great many of them do not want to be accountable for their own actions.
The questions I heard from Wall St. risk managers were fairly basic and simple, yet I cannot tell you how many times, I heard the same statements on how it was another person’s doing.
Most money managers, especially traders make far more losing transactions than winners, but if you lose one cent nine times and then make ten cents one time you still end up way ahead at the finish line.
Crypto’s seem to have a knack for attracting many who want to make a quick return. After all, who doesn’t?
That said, if it was that easy it would not exist. A known fact, is the higher the volatility of an asset, the larger the price swings are, so if one is looking for the 1000% return, that same person should be willing to risk 99%.
One may want to ask themselves before any investment is made in anything these questions.
Why do you own the asset you just purchased?
What is your time frame?
Is your capital limited? Is it fully allocated? Are you buying at multiple points? Have you done research that make you comfortable? Do you have a plan for exit when your investment increases? What is your plan if it decreases?
Markets have this tendency to make smaller balance sheets uncomfortable, so the bigger balance sheets can absorb those positions as a price advantage.
On a more personal note, I would like to share a story of how I got involved with Crypto’s, Saul and PAC.
Having been on Wall St for eighteen years, the first time I looked at Crypto Markets, I saw something that had huge potential and tremendous opportunity. I was fortunate enough to meet Saul and he told me about his vision. Had I not, I can honestly say I would not have ever gotten involved in this space. So, I started using all of the tools and I had learned and accumulated throughout my career and applying them to the Crypto World. Things just started to click, it made sense, and it was like I had a second chance to go back in time to the mid 1990’s when most people did not even know what internet commerce was. For that, I will always be grateful for meeting Saul. I had seen forks, stock splits, spinoffs, but I had never seen an RCO as it is called in PAC Coin, and I thought, no matter what happens, this will be interesting. It seemed around this time that altcoins were catching “fork fever” as I call it, where they are just creating wealth out of this air. You own BTC, now we will give you Bitcoin Cash, Bitcoin Gold, Bitcoin 1, 2, 3, etc, etc. So this redemption was one of the first of its kind. For disclosure, I was long PAC and redeemed my coins for $PAC. The turnaround time was same day. I don’t know if many people realize what Saul and the whole PAC team and community have accomplished.
Tens of thousands of people send their hard-earned money to an exchange, bought PAC and sent it to a wallet address of someone they did not know putting 100% trust in the PAC team. How often does one do that, I know I have never done that? Low and behold, each person received the new $PAC in their new wallet and my trust level and belief increased yet again.
In closing, I have plethora of charts, primarily on market cap and percentage of the crypto space listed below.
One Year Cryptocurrency Total Market Value
One Year Cryptocurrency Market Cap, All Coins Less BTC
BTC Market Share Multi Year
All Coin less BTC Total Market Share
LTC Market Share
Ethereum Market Share
Ripple Market Share