July 2018


Cryptalgo Development Status

 

ALGOTRADER: trade volumes on cryptocurrency exchanges have come down substantially since January. As an example, the daily trade volume for Bitcoin currently stands at around USD 4 billion, half what it was at the end of January. We are mitigating this trend by developing new trading algorithms using a Maker / Taker and Maker / Maker approach. Using a market maker strategy reduces trading costs – exchanges charge less if we provide liquidity – which in turn increases the number of trade opportunities. The impact of these new strategies on ALGOTRADER will be more transactions in smaller sizes.   

NEW PARTNERSHIP: we have entered a strategic partnership with NKB Group with the aim of developing brokerage and asset management services across both firms. Under the partnership we will provide our Order Execution Management System (OEMS) to NKB Group to facilitate their cryptocurrency trade execution, while we investigate the launch of a cryptocurrency arbitrage fund in the Cayman Islands using NKB’s regulated asset management platform and our ALGOTRADER investment product. We look forward to working on this project with NKB Group; like Cryptalgo, NKB combines innovative technology expertise in cryptocurrencies and long-standing experience in investment banking.

BROKERAGE: We are implementing phase 1 of our Order Execution Management System which will enable institutional clients to execute cryptocurrency trades across multiple connected exchanges with minimal latency using a single, integrated platform and account management system. Phase 1 of the system will allow customers to execute trades on all exchanges CRYPTALGO has accounts with, through a single API. The next phase will include automated transfers between exchanges. Ultimately we aim to provide instant availability of inventory across all exchanges.

 

 

Cryptocurrencies Market Update

 

Cryptocurrency prices bounced back in July as the market gained +13% across the top ten coins (and +16% in terms of global market capitalisation). The most notable performance came from Bitcoin itself which rose +29%, consolidating its market dominance. The price of Bitcoin stood at 8,207 on 29 July, according to coinmarketcap.com. Total market capitalisation was USD 290 billion across the top 200 coins. The top ten table remained largely unchanged in terms of currencies and ranks, the only exception being Stellar which moved up to sixth place (replacing Litecoin, which dropped to seventh). Stellar gained +61% in July; the token was supported by Coinbase’s announcement that it was exploring listing the currency on its exchange, as well as the news that it had received a Sharia compliance certificate for payments from a leading agency in Bahrain. Tether remained in 10th position for a second consecutive month, consolidating its position among the largest cryptocurrencies.

 

Data source: www.coinmarketcap.com

With a market capitalisation of USD 141 billion, Bitcoin’s dominance stood at 48% at the end of July, 4% higher than last month. Ethereum and Ripple lost -2% and -1% respectively. Stellar’s market capitalisation rose from USD 3.6 to USD 5.9 billion (it now represents 2% of the total market).

Data source: www.coinmarketcap.com

We noted last month how daily trading volumes had risen within a downtrend, indicating that the market may have bottomed. July’s performance confirmed this signal as markets rose +16%. At the end of July daily trading volumes have receded slightly, down -11% to USD 11.8 billion.  The largest volume drops were seen for Ripple (-43%) and Ethereum Classic (-33%).

Data source: www.coinmarketcap.com

Bitcoin’s volatility receded in July, closing the month at 59% (down from 65% the previous month). The market experienced three days of sharp rises, on July 2nd (+12%), July 16th (+7%) and July 18th (+10%). The price rise appears to be a correction from oversold levels that were reached in June, mainly fuelled by trading speculation, but also by positive news related to cryptocurrencies in general. For example the price rise on July 16th was related to an announcement by BlackRock (the world’s largest asset manager) that it was exploring ways to take advantage of the cryptocurrency market.

Data source: Bloomberg

Token offering volumes for June fell to USD 584 million. This figure excludes the EOS offering completed on June 1st which raised a total of USD 4.2 billion over a one year period. EOS is number five among the top ten cryptocurrencies with a market capitalisation of USD 7.4 billion. The project comprises a blockchain architecture designed to enable vertical and horizontal scaling of decentralised applications. The total number of successful ICOs in June was 33, the largest offering raised USD 47.8 million and the smallest USD 2.1 million.

 

Data source: Token Data

Cryptocurrency Market News

 

Early in July, Chinese media reported that Bitmain Technologies, the Beijing-headquartered bitcoin mining machines producer (ASIC chips), has raised up to $400 million in its latest fundraising round, valuing the company at $12 billion.

There were several news reports related to Cryptocurrency ETFs in July.

On July 8th we saw a report that CBOE Global Markets had applied with the SEC for a new Bitcoin ETF. The SEC has recently clarified that Bitcoin and Ethereum are not considered securities, which should give a Bitcoin ETF better chances of success.

Financial News reported on July 16th that BlackRock, the largest global ETF provider and asset manager with over USD 6.3 trillion under management, announced the creation of a working group to assess potential involvement in Bitcoin. BlackRock, previously negative about cryptocurrencies, may consider offering Bitcoin futures and other products to clients, subject to an investigation of the market.

Later on July 26th came an announcement that the SEC had rejected the Winklevoss brothers’ ETF for the second time. The agency highlighted concerns about market manipulation that had not been adequately addressed by the Exchange (Bats) or the structure of the proposal.

Meanwhile, on July 17th the Stellar Development Foundation reported that it had obtained Sharia certification for payments and asset tokenisation by the Shariyah Review Bureau (SRB), a leading international Sharia advisory agency licensed by the Central Bank of Bahrain. The Stellar token (XLM) posted a +17% rise the following day.

 

 

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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