H2 2018 Crypto Report Highlights

The CoinShares Research H2 2018 Crypto Report is finally out, and per usual Iā€™m posting a quick summary of the points we found most interesting about the second half of 2018:

By   Christopher Bendiksen 22nd February 2019
  • Bitcoin prices finished off 2018 as its worst year on record in percentage terms. While prices have fallen further from peak to trough in previous cycles, the close alignment of the 2017 market peak to the end of the year caused the 73% annual drawdown to make overall 2018 price performance the worst in Bitcoin history.
  • The Ethereum hashrate fell by 35% over the course of Q3 and Q4. Litecoin fared even worse, with a total hashrate reduction of 41%. Out of our three PoW coins covered, only Bitcoin experienced growth in its hashrate, with an increase of 11% from July through December. While the hashrates of both Bitcoin and Litecoin have significantly recovered from their respective drawdowns, the Ethereum hashrate continues to fall.
  • Total trade volumes fell drastically across all major trading pairs and exchange jurisdictions. In the Top 5 Markets by Volume, BTC volume fell by 58%, LTC by 78%, ETH by 70%, and ā€” worst of the four ā€” XRP by 82%. The United States and British Virgin Islands still dominate as hosting jurisdictions for trade volumes, followed by Korea, Japan and Luxembourg in various relative positions depending on trading pair.
  • Market-relative KRW volumes of BTC and LTC were extremely large in October and November, accounting for more than 50% of total volume on our measured exchanges in November and almost 75% in October. By December, these volumes had normalised, with the KRW pairs again representing only a single digit percentage of total trades. Many theories have been offered as an explanation for this development, ranging from stock market mayhem driving investors into crypto, to Japanese traders flocking to Korean venues in the wake of Japanese exchange hacks, but we find no single adequate explanation fully satisfactory and therefore refrain from speculating further on causes.
  • Volatility fell year-on-year for all four assets covered. As the wild price swings of 2017 gave way to the slow-bleed towards cycle bottoms during 2018, relative movement sizes shrank across all assets. If previous cycles are to afford any insight into likely developments of future cycles, we expect this trend to continue over the next few years as the market consolidates and recharges, before being broken either in the preceding- or in the peak-year of the next bull run.


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