April 2018


Cryptalgo Development Status

 

ALGOTRADER: we have reached an important milestone this month in the development of ALGOTRADER, our strategy exploiting crypto market inefficiencies across exchanges. We are now trading live with real money. The strategy seeks opportunities and once identified, executes trades on various exchanges (buy and sell). The initial live results are highly encouraging.

New Telegram channels: in the past week we opened a public Telegram announcement channel which is available through this link. We also opened a private Telegram discussion group covering CRYPTALGO and the solutions we provide. It is a closed group, with plans to open to the public in the future. If you are interested in joining please contact @White_clerk or @emguild for a quick conversation.

Industry engagement: in April, we entered into a partnership with Put Capital, a UK company which offers online trading signals, strategies and training on underlying assets including stocks, currencies, cryptocurrencies and binary options. We will be providing them with Best Execution. In addition, Ed Mount joined CRYPTALGO’s advisory board this month. Ed is co-founder of Elysium Technology Group, a market leader in FX risk management and post-trade processing systems designed for financial institutions. Previously, Ed held senior positions with several of the world’s largest investment banks, including Managing Director and Global Head of Electronic FX Trading at both Nomura and Royal Bank of Scotland, and Global Head of Commodities and Precious Metals for UBS and Swiss Bank Corporation.

 

 

Cryptocurrencies Market Update

 

Cryptocurrencies achieved an impressive rebound in April as prices rose by an average +66% across the ten largest coins. Among these, all but one finished positive. EOS, which develops blockchain based applications, posted the largest monthly gain (+210%); at USD 17bn it is now 5th in terms of market capitalisation (see table below – it ranked 9th at the end of February) and has overtaken Litecoin and Cardano. Other tokens such as Cardano (+101%), Stellar (+91%), and TRON (+79%) also performed very well since the end of March, both against Bitcoin and the US dollar. By contrast, Bitcoin’s progress was rather slow during the month, at +10%. Nevertheless it remains the largest cryptocurrency market capitalisation by a wide margin. Overall cryptocurrency market capitalisation (across the 200 largest coins) reached USD 424bn, up from USD 322bn in March (+32%). The bullish environment was broadly correlated to global equity and commodity prices which also rose during this period (at the time of publication, the MSCI World Index was up +1.4% and the Bloomberg Commodity Index was up +2.5%).

 

Data source: www.coinmarketcap.com

While Bitcoin remains the largest cryptocurrency by market capitalisation, its percentage share has fallen back to 38% as digital asset prices rose during April. Total market capitalisation now stands at USD 424bn, the same level as at the end of February, and 25% below month-end levels of December and January.

Data source: www.coinmarketcap.com

Beyond the rise in average coin prices and aggregate market capitalisation, 24-hour trading volumes for cryptocurrencies soared in April, indicating that investors appear to be taking risk again. The increase in trading volumes combined with cryptocurrency price rises is a potential signal that the correction started in January has come to an end. Total 24-hour volumes for the top 200 coins finished April at USD 29bn, up +119% from last month. 24-hour volumes for coins such as EOS, Cardano and Bitcoin Cash were up +926%, +725%, and +292% resepctively (see chart below). In US dollar terms the largest volume rise was seen in Bitcoin (USD +3.4 bn) followed by Tether (USD +2.9bn). We also note that EOS finished third in the table below, with a 24-hour volume of USD 3.4bn, ahead of Ethereum, Bitcoin Cash and Ripple.

Data source: www.coinmarketcap.com

Bitcoin’s price volatility continued to decline in April and finished the month at around 60%. Cryptocurrency markets are stabilising, a trend that has been apparent to us since last month. The trading range of Bitcoin (i.e. the difference between highest and lowest price achieved during the month) fell to 3,242 USD. It stood at 5,077 in March and 5,862 USD in February.

Data source: Bloomberg

After last numbers came in, ICO capital raised in March stood at USD 738m. This represents a slowdown below the USD 1bn mark, and it is understandble given the correction in coin prices that has taken place since January. Cryptocurrency investors have less capital to spend on new projects and this translates into smaller volumes being raised. It will be interesting to see whether this number picks up again in April, or whether it will lag the rebound in token prices that we have witnessed this month.

Data source: Token Data

Cryptocurrency Market News

 

After Binance, Bitfinex became the second major Hong Kong exchange to look into exiting the jurisdiction. According to a report in the German weekly newsprint Handelszeitung, summarised here, Hong Kong-based Bitfinex is already in talks with Swiss authorities over a move to Europe. Switzerland is at the top of the list of potential destinations while London is also being considered as an alternative, the report added.

On April 10th we noted that Gemini, the crypto exchange platform owned by the Winklevoss twins, is about to offer OTC block trading services in cryptocurrencies. We have been following similar developments for some time as block trading platforms have sprung up to address demands from large holders of coins (e.g. miners or companies that have completed a succesful ICO).

On April 16th Bloomberg published a story about Barclays Plc sounding out its clients regarding trading in cryptocurrencies. According to Bloomberg, Barclays has done a preliminary assessment of demand and feasibility. Barclays is the second investment bank after Goldman Sachs to investigate the possibility of trading cryptocurrencies on its own books, following high investor demand. We are well aware that services such as custody, trade execution and finance are still very much inadequate for institutional investors looking to enter this asset class.

Finally, according to a report on Bernews on April 27th, Premier and Minister of Finance of Bermuda David Burt signed a memorandum of understanding (MOU) with Binance Group to establish funding for educational programs related to fintech and blockchain startups. According to the MOU, Binance will spend up to USD 10m on university level training for Bermudians in blockchain technology development and compliance through the Binance Foundation. The company will also provide up to USD 5m in investments in new Bermuda-based blockchain companies through Binance Labs.

 

 

Disclaimer: the information contained herein is being furnished for discussion purposes only and may be subject to completion or amendment through the delivery of additional documentation.  This communication does not constitute an offer to sell or the solicitation of an offer to purchase any security, future or other financial instrument or product. Information is presented as of the date and, if applicable, time indicated. CRYPTALGO does not accept any responsibility for updating any such information. Any historical or simulated results presented herein should not and cannot be viewed as an indicator of future performance. Market views and opinions are current opinions only. CRYPTALGO is not an adviser as to legal, taxation, accounting, regulatory or financial matters in any jurisdiction, does not act as fiduciary or financial, investment or commodities trading advisor for any of its counterparties, and is not providing any advice as to any such matter to the recipient.  The recipient should discuss such matters with the recipient’s advisers or counsel and make an independent evaluation and judgment with respect to them.

Past performance may not be a reliable guide to future performance.

Market Updates


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Industry Perspectives


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