by Algalon Capital2018 in
Crypto
Your Ultimate Guide
to The Bear Land!
Intro
2018 is truly the year of struggle for crypto. While 2017 brought virtual currencies into mainstream as Bitcoin surpassed $10,000 and ICOs raised more than $3.8 billion, this year (and especially five last months) haven’t been that fun. The charts have mostly stayed red since August. Major coins, including BTC, ETH, and XRP, have lost anywhere around 90-95% of their value from their ATH. Current market capitalization varies from $110 to 130 billion — in January, that amount of market share was provided by ETH alone. Simply put, the bear has taken over. Optimistic investors are waiting for the hibernation to kick in, while the most desperate ones are calling capitulation.
It’s important to keep a cool head in this uneasy climate. Sure, the once obligatory Lambos now seem like a distant memory, but there are signs that good times might be ahead. In fact, the tech has been striving and prospering in 2018: blockchain is steadily being adopted by businesses and financial institutions, the number of dApp users is on the rise, while crypto startups have raised around $7-8 billion, which is almost twice as much as the previous year. Moreover, some major events for Big League investors — like the launch of NYSE’s digital assets platform Bakkt — are scheduled for early 2019. So hold on to those bags of yours — the future might not be so bleak after all!
MarketCap Revolution
On January 1 2018, total capitalization of top-10 cryptocurrencies made up for $501 billion, and that number was growing rapidly — by the end of next week, it rose to $823 billion. Current situation is much less favourable, as top-10 total cap in December adds up to around 100$ billion.
There has been a lot of power struggle among top 10 cryptocurrencies, too: most notably, XRP knocked ETH out of the second spot by the end of the year. Moreover, Bitcoin Cash split into two assets and they both cluster in the top-10 now, while Tether, EOS and Tron squeezed out IOTA, Nem and Dash.
Exchanges
As crypto exchanges hack losses this year are at least 250% higher than in 2017, some people start looking for more secure alternatives. Enter decentralized exchanges, where cryptocurrencies are traded peer-to-peer — no need to send your precious assets to an exposed hot wallet controlled by a centralized entity. Remember the famous “Not your keys, not your Bitcoin” quote? That’s where DEX might seem like a safer bet.
The trend is evident: by the end of 2018, players as big as Binance and Coinbase have announced their DEX solutions. However, peer-to-peer platforms are still greatly outperformed by more traditional, centralized exchanges, some of which have managed to preserve their reputation completely unstained.
TOP 10 Exchanges (by Volume, 24h)
Real-time data from Chainsage
...
TOP 10 DEXes on Ethereum (by Volume, 24h)
DEXes account only for about 0,04% of total trading 24h volume (...)
Curiously, DEX platforms built on EOS are steadily surpassing the ETH-based ones. It seems like it’s time to watch them closer.
Main DEX Acquisitions and Launches
TWEETBig players are onto the concept behind DEX. Next big thing in the making?
Acquisitions:
Paradex
CoinbaseLaunches:
Binance DEX
Binance
EOSfinex
Bitfinex
Bithumb DEXBithumb
Waves DEXWavesStablecoins
It’s not easy to achieve peace of mind in the not-so-stable market. That’s where stablecoins — assets which essentially attempt to mitigate the crypto’s infamous volatility and manipulation trading — come to the rescue. Also, they seem to attract big league investors for the same reasons — and hence, near the long-awaited mass-adoption.
In 2018, while the market was as volatile as ever, we’ve seen a major increase in the number of stablecoins. While there were around 5-6 established stablecoins at the start of the year, that number has since risen tenfold: there are approximately 60 of them as of now, although around half of those coins are still under development.
There are different types of stablecoins: some are pegged to fiat, some are backed by reserves comprised of other cryptocurrencies, while others are controlled by smart contracts. The allegedly USD-backed Tether remains to be the leader among them, despite accusations of propping up Bitcoin’s price and audit-related scandals — currently, it is the fifth largest cryptocurrency by market cap.
Investments in Stablecoins
TOP Stablecoins by Market Cap
#1 
Tether (USDT) — ...
...by market cap
2ndby trade volume
#2 
USD Coin (USDC, by Circle and Coinbase) — ...
#3 
TrueUSD (TrustToken, TUSD) — ...
#4 
Paxos Standard Token (PAX) — ...
#5 
Dai (DAI, by MakerDAO) — ...
Stablecoins Market Cap
Tether trade volume has fallen from 98% to 70% of all stablecoins share throughout 2018
ICOs in 2018
Although in 2018 the ICO market has raised the record amount of $8,27 billion, which is twice as much as last year, the number of coin offerings has been drastically falling since Q1. It is now evident that the Wild West period in crypto is coming to a close as the regulators have started to put ICOs under scrutiny. Consequently, the risks of holding public coin offerings within unknown regulatory environment, along with additional stigmatization caused by scam projects, have scared away a significant number of both participants and investors. The once go-to fundraising model has to find a way to remedy the compliance issues — or else, it might not stay afloat for much longer.
The most notable examples of ICOs in 2018 include blockchain protocol EOS and messenger app Telegram. Whilst the former has set an absolute record by raising a whooping $4,2 billion (almost half of the total funds raised by ICOs that year), the latter showed how a non-crypto company could take advantage of the ICO model before the watchdogs had arrived and the hype started to die out. Both EOS and Telegram account for most of the funds raised on the ICO market this year, which also suggests that there are not plenty of fish left in the sea.
Total funds raised$8.27B
Number of ICOs1,180
Despite the ICO downtrend, total funds raised in 2018 significantly outweigh last year’s results. That is explained by the three abnormally large offerings of this year: Telegram, EOS, and TaTaTu.
Top 10 ICOs of 2018
TOP ROI Gainers of 2018 ICOs
These are criterias of successful ICOs for our reports.
An ICO is considered successful if the following conditions are met:
- The soft cap is reached.
- More than 50% of the target or hard cap is collected.
An ICO is considered a failure if at least one of these conditions are met:
- The soft cap is not reached.
- Less than 50% of the target or hard cap is collected.
- No information on the project status or funds raised is available, the official website has been deleted, and/or the official Bitcointalk thread has been cleared.
If the soft cap, target, and hard cap are not stated, our experts will analyze the project and make sure the funds raised are sufficient to implement the business idea. Thus, if a company has collected the necessary funds to implement its roadmap, we deem it a success. If not, it is considered unsuccessful.
These terms are the key metrics in our reports:
- “Soft cap” is the minimum amount required by the project.
- “Target” is the funding goal as stated by the project’s team.
- If a target is not stated, then we use the “hard cap,” which is the maximum amount the project hopes to achieve or the technical limit of the crowdsale.
- The ICO market size covered in this report should not be considered the overall money flow coming into the crypto market from fiat, as there is still speculation surrounding tokens. We are simply exposing the willingness of crypto holders to participate in new projects with BTC, ETH, and fiat currencies.
STOs
Security Token Offering (STOs) is a way of fundraising similar to ICO, but with more compliance and accountability in mind — crucial features, given the current market landscape. In short, STOs are designed to be held in collaboration with regulators, instead of delving into grey area that are ICOs and hoping to get past the SEC.
STOs represent a very anticipated, yet very mature market: the number of such offerings is steadily growing this year, but there are barely any concrete examples (just five STOs were closed this year, while the rest is ongoing/postponed to 2019).
Moreover, it is too early to say that STOs have actually dealt with regulation-related issues: while they are generally marketed as “compliant”, STOs are still to receive definite green light from the watchdogs. The most noticeable projects include Blockestate and Corl held by Polymath securities token platform as well as a German project called Rise.
41STOs in 2018 announced
5 STOs in 2018 closed
6 Still ongoing
The rest are unsuccessful or have not disclosed information
$262.2MTotal Funds Raised
At least 11 STOs postponed to 2019 among announced in Q3-Q4 2018
Closed STOs 2018
Security Tokens Infrastructure
We have completed our analysis of the current state of the security token space and are happy to present our findings all packed within an interactive scheme, showcasing the major players and offering a corresponding timeline and activity-status filters.
Destinations For 2019: New Crypto Jurisdictions
Throughout the year, we monitored legal reviews and news regarding best jurisdictions for holding ICOs or, more lately, STOs. It seems like at this point everyone and their mom know about pros and cons of doing crypto business in Malta, Estonia or various states of the US. Hence, this time around we decided to focus on newer countries for compliant token sales and fundraising — so that you know where you might head to in 2019.
We hope you
survived this
year too
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