A week does not go by in the world of cryptocurrency without some kind of drama. Examining the events of the past week and observing the trends of the crypto market, our weekly Market Wrap-up aims to keep you informed of the latest happenings in crypto, even if you’re not the type to peek at your Blockfolio on an hourly basis.
That’s the expression that’s been resonating throughout the crypto world over the past week. In particular, the predominant narrative regarding the fall of Ethereum from its once lofty heights revolves around the theory that numerous ICO’s, pressured to stay afloat and paying the bills to keep the lights on, have been forced to liquidate holdings in Ether, driving the price downwards.
To attribute the fall of any asset or of the market in general to a single factor always runs the risk of over-simplification, and while the ICO sell-off may well have contributed to the drop in ETH prices, it is more likely that the market trends are influenced by numerous harder-to-quantify factors such as whale activities in addition to fearful traders avoiding exposure to weak assets (the “buy high, sell low” panic-sell mentality is stunningly common), and a general sense of unease and fear in the market.
Ever the optimist, Mike Novogratz of Galaxy Digital, along with numerous other experts and analysts have been declaring that the bottom appears to be in for the market. However, it is quite likely that traders will continue to move assets away from smaller projects and altcoins into BTC as talk of institutional investment continues to build around the premium cryptocurrency of the market. So while the market as a whole may indeed be moving into a recovery phase, it’s likely that Bitcoin volume will continue to consume smaller projects as it grows.
The introduction of yet another stable coin, this time by the Winklevoss twins on their Gemini trading platform, created a bit of a positive buzz. The de facto industry standard stable coin, Tether (USDT), has come under fire repeatedly in the past for its lack of transparency and its ironic capacity to seemingly print more of the currency at will — a concept antithetical to the built-in scarcity properties of deflationary coins like Bitcoin — often causing positive trends in volume and price in the larger market. Tether has long avoided any kind of legitimate audit process — a major selling point of the newly touted Gemini stable coin. Additionally, the new Gemini coin is approved by New York state regulators, compliant with the SEC, and backed by the investment bank, State Street.
Some view the addition of a respected and recognized stable coin as another feather in the cap of legitimacy for the cryptocurrency industry while critics have expressed concern regarding its redundancy and potential to be yet another coin with little genuine utility other than the opportunity for the Winklevoss twins to find another angle to cash in on a dwindling market.
In the positive movement category for the week, Dogecoin continued its somewhat baffling positive growth along with currencies including Tezos and the lesser known, smaller cap project, Aurora, yet another ERC20 project vying for investors in IoT smart contract platforms with DPOS high transaction speeds as the major selling point. Due to its relatively small market cap and the fact it is traded on only one major exchange (Kucoin), it is fairly easy to artificially pump the price of such a token, so beware. Genesis Vision also saw extremely positive growth with a major spike in price and volume following the weekend announcement that the platform will go live on October 30. Even following the inevitable cooling period after such a rapid climb, GVT is still up nearly 40% over the week.
On the negative side of the equation, both Waltonchain and Holo suffered significant drops in value following bullish rallies in the recent past. It is possible that these projects are over-sold at this point after profit-taking following earlier positive momentum, although they appear to be trending towards consolidation as their highs and lows continue to narrow. Other major names like Cardano and WAX have also seen lacklustre performance as of late, and could be due for rallies some time soon. They may experience a positive shift as their prices seem to be reaching a sort of bottoming out, as well.
It should be noted that all of these observations are just that — observations I have made about the market over the past week. This is not professional financial advice and is intended only to act as a quick wrap-up of the week’s events for you to enjoy. Please do your own research before doing any investing and never risk more than you can afford to lose.