December 2018


 

Cryptalgo Development Status

 

INSTITUTIONAL CRYPTO AND SECURITY TOKENS SECONDARY TRADING AND LIQUIDITY PLATFORM

We released a pre-alpha version of our OEMS during December. We have been showing the system to prospective clients, the presentations have been well received and clients have confirmed their interest as users once we go live. The OEMS comprises a state-of-the-art user interface connected to CRYPTALGO’s Galaxy backbone. It includes some key features such as:

  • dynamic aggregated order book views, allowing users to switch between the whole market, prices for user-connected exchanges only, and executable prices based on inventory held at exchanges
  • view of balances per exchange, transfer of balances between exchanges
  • smart routing execution to exchanges with best prices and best liquidity
  • trade execution algorithms such as VWAP, TWAP, and basket trades
  • two-factor authentication of orders sent through the system

The user interface can be customised, displaying various modules depending on user requirements. Below are some examples of the modules.

Aggregated order book module

Smart routing execution module

 

 

 

 

Cryptocurrencies Market Update

 

Cryptocurrency prices stabilised during December (following the November sell-off) with overall market capitalisation increasing by +7% to USD 127 billion at month end. For 2018, the market capitalisation of the top 200 coins is down -77% (it closed at USD 566 billion in December 2017). The price of Bitcoin remained volatile, trading between highs around USD 4,200 and lows of USD 3,200 (depending on which exchange you look at). It closed the month at USD 3,837 (as published by coinmarketcap, +1.8% higher than at the end of November). Its 20-day volatility reached a high of 103% on December 21, before settling around 83% by month end. Ethereum’s price finished up +26.7%, at USD 136.7.

In the top ten table, Ripple confirmed its position at number two, followed by Ethereum at number three. We are welcoming a new entrant at number nine, Bitcoin SV, one of the coins that spun off from Bitcoin Cash’s hard fork on November 15th. On a related note, BCH (the other side of the fork also known as Bitcoin Cash ABC) closed the month at USD 163 while Bitcoin SV (BSV) has fallen behind, closing at USD 89 (they were trading at roughly the same level earlier in December).  Bitcoin’s market cap domination finished at +53%, two percent lower than last month. Ethereum’s portion rose by +2%, to 11%.

Data sources: Bloomberg, www.coinmarketcap.com

Trading volumes on cryptocurrency exchanges continued to rise in December, climbing to USD 16.2 billion over 24 hours for the top 200 coins (+10% compared to last month). Having said that, trading volumes on the Bitcoin Blockchain (a measure that filters out transactions within exchanges) declined from USD 750 milliion to USD 380 million (-49%).

 

 

 

Data source: www.coinmarketcap.com, www.blockchain.com

As we are going to press, Tokendata has reported ICO volumes for both October and November 2018 which are generally in decline (the data was not available last month). October saw a modest increase in raised funding, to USD 199 million (across 21 projects), but in November the amount fell back to only USD 66 million (across 12 projects), its lowest since March 2017. As such, ICO funding appears to be drying up as investors seem to prefer buying traditional equity stakes.

 

 

Other Cryptocurrency Market News

 

On December 12th the Cambridge Centre for Alternative Finance released a study showing that the number of cryptocurrency verified users climbed from 18 million to 35 million this year, despite the contraction in the market (overall market capitalisation fell from USD 566 billion in December 2017 to USD 127 billion in December 2018).

Meanwhile Coinbase announced on 7 December that it is considering adding another 30 new coins to its exchange, including the highly anticipated XRP (Ripple). Coinbase, recently valued at $8 billion, like most other crypto start-ups has been on high alert to stay on the right side of regulation. The U.S. Securities and Exchange Commission has repeatedly warned cryptocurrency founders that initial coin offerings, aside from bitcoin and ether, are classified as securities and have to register accordingly. San Francisco-based payment company Ripple, which owns roughly 60 percent of the XRP in existence and uses it for its cross-border payments products, has been in talks with Coinbase since at least April about adding the cryptocurrency.

In a Bloomberg article published on December 13th, we saw that Pantera Capital Management, a well known crypto hedge fund, notified investors via a newsletter that about 25 percent of the blockchain and digital-currency projects that its ICO fund invested in could be found in violation of U.S. securities laws and may have to refund money to their backers.

Around mid-December Samsung announced via its news site SamMobile that it is developing a cold and hot wallet for cryptocurrency storage and trading. The service and app may be launched with the upcoming new Galaxy S10.

In Europe, the Netherlands is seeking to regulate cryptocurrency companies by requiring them to acquire an operating licence from the country’s central bank. The legislation is still in draft format. In France, daily news publication les Echos reported that members of parliament have proposed spending EUR 500 million on state-level blockchain projects over the next three years.

UK based payment and cryptocurrency broker firm Revolut secured a European banking license that will allow the company to offer traditional banking services in the UK, France, Germany and Poland. It plans to roll out the services in 2019.

 

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.

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