Recent Crypto Market Dynamics And Assets Worth Considering
Viktor Shpakovsky | Sep 11, 2017 01:29AM ET
In early September, the cryptocurrency market reached new heights and Bitcoin was trading at approximately $5,000. Expecting this psychologically significant level to cause price corrections, in the second half of August we gradually reduced the share of Bitcoin in our portfolio. Transactions were made during both the price boost in August, ranging from $4,400 up to $4,700, and the recent decrease. As to Bitcoin, high price volatility persists and floats of dozens of percent per week cannot be ruled out either. In such circumstances, our fund is planning to actively manage the Bitcoin balance by using trading strategy elements.
Ethereum, which had long called up its strength to leapfrog, managed to reach its previous historic highs and surpassed $390. Deferred demand was a positive influence, as well as the developers’ plans to modify and improve the protocol. Expected to be implemented through Hard Fork, the software’s new version, Metropolis, is to be launched in late September and is expected to enhance Ethereum’s performance, marking an important transition phase from the proof-of-work algorithm to the proof-of-stake one. Like many other market players, we expected ether to keep ascending towards new heights and, accordingly, continued to increase its share in the portfolio.
On September 2nd, the value of the fund’s token, TKN , reached an all-time high of $58.588 USD since the launch of the fund, whereas the portfolio’s income surpassed 485% the same day.
The market’s unpredictability is further evidenced by China’s decision to ban all ICOs within China, as announced by the People’s Bank of China. The correction of early September affected the whole market and had a dramatic impact on the value of Asia-oriented projects and venues for holding ICOs, namely, Ethereum and NEO. A setback for NEO was used to enter the market, the aim being to participate in the Red Pulse project (see details below), the first one for this ICO platform.
The price of Litecoin reached $93, but dropped quickly. Litecoin’s share surpassed 10% in the portfolio and was reduced to 8%. Melon, Nexium and Status tokens were equally excluded from the portfolio, with no encouraging news and a decline in trading volume. Waves’ tokens were sold, too, because the company is oriented towards the CIS market, while no timeline has been set for the regulation of crypto assets in this jurisdiction.
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The objective of this rebalancing was to increase the share of the more promising altcoins: Zcash (increasing interest in anonymous transactions), 0x (plans for a further expansion of listing venues); EOS (a record low of the so-called first ICO window of 0.87$).
Here is how our portfolio looks to date:
We see this coming week as the right timing to enrich our portfolio with new crypto assets, which have long been present on the market and are more conducive to purchase compared to Bitcoin. As a result, each of the following venues received a modest share of the portfolio: Stratis, a powerful platform designed to develop blockchain applications and to meet the needs of real-life companies in financial services, which intend to develop, test and deploy applications of blockchain technology; and Factom, a decentralized document storage system running on top of Bitcoin. Tokens of the TenX payments system, along with ReddCoin and Particl cryptocurrencies, are also considered for inclusion in the portfolio.
A small share of USDT is currently present in the Token Fund portfolio. We believe that the correction is likely to continue and that reserves should be held in stock to acquire liquid crypto assets in case of a significant decrease in prices.
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