Nichehunt

Bitcoin Cash, the most controversial coin in cryptocurrency, has made huge gains after being added to Coinbase.

Bitcoin Cash was created as the result of a controversial hard fork in August. Debate had raged for months over adding the Segregated Witness (SegWit) transaction protocol to Bitcoin. SegWit was intended to speed up transaction times, which have slowed down considerably as Bitcoin’s popularity has grown.

Anyone holding Bitcoin was automatically credited with an equivalent amount of Bitcoin Cash following the hard fork. However, users of exchanges such as Coinbase missed out on the bounty if the exchange their Bitcoin was stored on didn’t offer support for the new cryptocurrency.

That all changed within the last 24 hours as Coinbase added Bitcoin Cash to the select list of major cryptocurrencies available on the platform. Users who had held Bitcoin prior to the August hard fork were suddenly credited the amount of Bitcoin Cash that had previously been withheld.

Bitcoin Cash rose immediately following the announcement. On December 19, Bitcoin Cash was trading as low as $2,225. Less than four hours later, Bitcoin Cash was trading at $3,814.

Bitcoin Cash and Bitcoin typically share an inverse relationship and Bitcoin fell sharply after the news broke. At its lowest point on the morning of December 20, Bitcoin hit $16,353. At its highest point on December 19, Bitcoin had been trading at $19,171.

Coinbase’s announcement is a huge boost to Bitcoin Cash’s legitimacy. Many ardent Bitcoin supporters have been extremely critical of Bitcoin Cash and its public face, Roger Ver. Ver was a major early supporter of Bitcoin and related projects including Ripple, Blockchain.info, Bitpay, and Kraken. His public support for the burgeoning cryptocurrency earned him the nickname Bitcoin Jesus. However, following the Bitcoin Cash hard fork, many began villainizing Ver as a Bitcoin Judas.

There has been a campaign among some in the Bitcoin community to drop ‘Bitcoin’ from Bitcoin Cash’s name. Those backing this campaign would prefer Bitcoin Cash be referred to as Bcash. Similarly, Ver and his supporters usually refer to the original cryptocurrency as Bitcoin Core.

The battle for the mantle of the one true Bitcoin has seriously been rebalanced following Coinbase’s move, which now allows the exchange’s huge userbase to buy Bitcoin Cash with major fiat currencies.

Another major news story related to the move is the emergence of claims that Coinbase staff had used foreknowledge of the announcement to profit from Bitcoin Cash’s sudden spike. Coinbase is currently conducting an internal investigation into the matter, as its staff and their immediate family are prohibited from using their inside knowledge to benefit from market movement. This comes at a time when Coinbase and other exchanges are taking an increasingly proactive stance against deliberate manipulation of cryptocurrency markets.

Robert Bosch Venture Capital GmbH (RBVC), the corporate venture capital company of the Bosch Group, has purchased a significant amount of IOTA tokens, one of the largest cryptocurrencies in the world. In doing so it hopes to intensify the collaboration with the IOTA Foundation, an open-source non-profit foundation from Germany.

RBVC also intends to elevate the technology to maturity by bringing it closer to Bosch’s global ecosystem and key partners. “Distributed ledger technology will play an important role in the industry of tomorrow,” said Dr. Ingo Ramesohl, Managing Director at RBVC. “Bosch is one of the pioneers actively driving the adoption of distributed ledger technology in the automotive and Internet of Things (IoT) industry. The investment in IOTA’s token, the first ever token investment of RBVC, will help us working closely with the IOTA Foundation to explore the industrialization of this exciting technology.”

RBVC’s investment broadens the potential for new business models for the IoT in any number of verticals and uniquely positions IOTA and Bosch to take on the challenges of IoT together. Dr. Hongquan Jiang, Partner at RBVC, will join the IOTA Foundation’s advisory board. The investment follows the successful launch of IOTA’s data marketplace, with more than 30 leading companies worldwide participating.

IOTA, which is the first distributed ledger technology to go beyond a Blockchain, enables machines to securely transact data and money with each other. This is the stepping stone to new innovative IoT based applications and business models such as mobility, energy or industry 4.0. The IOTA technology has already enabled more than 10 billion dollars to be transacted, and has been utilized for use cases including transparent value chains, secure over-the-air updates and feeless micropayment-based electric vehicle charging or parking.

Synergies between Bosch and IOTA Foundation expected

“We have been working with the IOTA team for more than one year. I’m very excited about IOTA’s innovative tangle technology, which could potentially become the standard underlying technology for trustless machine to machine communication, security and payment in the IoT space,” said Dr. Hongquan Jiang. “There will be much synergy between Bosch and the IOTA Foundation, and I’m looking forward to seeing more industrial adoptions of this technology in the near future.”

“The purchase of IOTA tokens by RBVC is a strong vote of confidence for the technology and the ecosystem we have built over the years,” said Dominik Schiener, Co-Founder of IOTA. ”Distributed ledgers are the future when it comes to truly unleashing the IoT, and with IOTA we see the potential of becoming the backbone of this emerging Machine Economy. We will continue to intensify our collaboration with leading IoT companies and hope to have the first go-to-market solutions ready by the end of 2018.”

“Bosch and IOTA have been in contact since 2015 and are working together on multiple fronts, including the Trusted IoT Alliance (TIOTA) and other projects,” said David Sønstebø, Co-Founder of IOTA. “The decision by RBVC to acquire a significant amount of iota tokens solidifies the idea of the Machine Economy and how significant leaders in this space share our vision.”

How much BOSCH has invested in IOTA?

It’s unknown how much BOSCH has invested in IOTA cryptocurrency. However, according to the RBVC investment strategy, company’s typical aggregate investment allocation per portfolio company ranges, including follow-on investments, typically between EUR 6 and 15 million.

 

 

Source: BOSCH

With Bitcoin dropping from an all-time high above $20,000 on December 19 to $17,756 at the time of writing, most other coins have experienced massive recent surges in their valuation.

Cardano has been one of the biggest gainers, moving past IOTA to become the sixth largest cryptocurrency by market cap. Cardano’s rapid ascent has seen it increase from around $0.11 per ADA token a week ago to a high of $0.57 earlier today.

But one of the biggest stories has been the sudden movement of Chinese cryptocurrencies NEO and QTUM. Both are platforms which allow for DApps and smart contracts in a manner similar to Ethereum. NEO’s ardent supporters sometimes baulk at the nickname “Chinese Ethereum,” feeling that NEO’s focus on being an advanced platform for the smart economy is one of several important distinctions that differentiate it from Ethereum.

Meanwhile, QTUM’s biggest supporters have often expressed disliked for NEO’s “Chinese Ethereum” tag for the opposite reason. This pithy slogan is symbolic of NEO’s far superior marketing, which has long given NEO a competitive edge over QTUM.

Many of the largest cryptocurrencies are still in the early stages of their development, with their current valuations representing pure speculation about future growth. There has been a feeling in both the NEO and QTUM communities that both coins were consequently massively undervalued relative to other cryptocurrencies. Both already boast functional platforms and a number of exciting projects which will be launching in 2018.

The markets seem to finally be reflecting the immense promise of both NEO and QTUM. After months of static growth that have seen their value fall relative to Bitcoin and other cryptocurrencies, NEO and QTUM have suddenly exploded.

NEO was trading as low as $33.16 on December 11, while QTUM was at $11.05. NEO hit $82 on December 19, giving it a market capitalization of $5.3 billion. QTUM’s growth has been even more explosive, posting a roughly 11x increase for an all-time high of $77.75. While NEO is valued slightly higher by unit, QTUM now has the greater market capitalization, with a total worth of $5.7 billion.

But when comparing the relative worth of NEO and QTUM, it’s important to consider NEO’s Gas. Holding NEO in a private wallet allows you to generate Gas, which fuels the operation of DApps on the NEO platform. How much Gas your NEO generates depends both on how much you hold and how much activity is occurring on NEO’s platform. It therefore seems likely that Gas generation will increase as more DApps begin operating in the next year.

Gas is available for trade on cryptocurrency exchanges and it has also made big gains in the last few days, moving from a low of $17.74 on December 12 to a high of $47.73 on December 18.

On Monday December 18, Bitcoin futures made their long-awaited debut on the Chicago Mercantile Exchange (CME). The current outlook suggests a slight bearish trend heading into the next year.

Bitcoin’s value has surged over the past month, beginning December trading at around $10,000 and doubling to more than $20,000 by December 17. The price has fallen since CME’s futures went live, with the price being $18,500 at the time of writing.

CME’s futures suggest a slightly bearish attitude to Bitcoin’s explosive growth heading into the next year, with futures to be settled in January dropping from an opening high of $20,650 to $18,500 at the time of writing.

CME is the world’s largest derivatives and futures exchange and its listing of Bitcoin futures allows institutional investment in cryptocurrency for the first time. Major financial institutions are prohibited from trading in Bitcoin directly due to the market’s current unregulated status.

Each futures contract is for five Bitcoin, giving each January contract a current total value of $92,500. Bitcoin futures appears to have been an attractive proposition for many large-scale investors, with 194 contracts having been sold for a total worth in excess of $3.5 million.

It won’t be a surprise to anyone who’s been watching Bitcoin’s wild price fluctuations over the past year that the value of Bitcoin futures is proving just as volatile, moving by hundreds of dollars within minutes.

Bitcoin’s innate volatility has made longer term futures contracts much less attractive. While 195 contracts have been for January, just 8 Bitcoins futures contracts have been traded for settlement in February and March respectively. There are currently no takers for Bitcoin futures contracts expiring in June.

These longer-term contracts suggest a lack of confidence in continued exponential growth in Bitcoin’s value. Futures contract for February are currently trading at $19,240 per Bitcoin, while contracts for March value Bitcoin at $18,435.

Cryptocurrency has exploded over the past year in why that defies all traditional rules of investment. There are countless theories and approaches to stock market investment and valuation, but a common rule of thumb is that a company’s market cap represents a lifetime of earnings. The basic mathematics underpinning this rule is that a company’s market capitalization should be around twenty times its annual earnings.

Of course, there are many other factors that play into stock valuation and market cap. Things like a company’s infrastructure and assets need to be taken into account, as does the potential for future growth.

Most cryptocurrencies are trading solely on their future potential. In fact, there are top cryptocurrencies which have little more than a white paper outlining their future growth potential. Some have yet to demonstrate a working product.

So how can you work out whether cryptocurrencies are correctly valued?

There is no exact science to valuing cryptocurrencies. Whether you consider them overvalued or undervalued is completely dependent on how strongly you believe in their future growth potential.

The intention with this article is to ballpark the value ascribed to the top 15 cryptocurrencies by showing which companies on the NASDAQ and NYSE stock indexes have a similar market capitalization. Wherever possible, this article focuses on the brands and companies which will be most recognizable to the largest number of people. There is more focus on retailers and clothing brands than financial services companies and retail investment trusts, simply because the aim is to make this information as accessible as possible.

And before we begin, it’s worth pointing out that the cryptocurrency market is incredibly volatile compared to the NASDAQ and NYSE. A 5% loss or gain represents a huge movement in the stock market, while 20% is earth-shattering. In contrasts, cryptocurrencies can move 5% in five minutes. A single-day swing of 20% is nothing out of the ordinary. Just in the past few weeks, IOTA and Litecoin have seen their values increase by magnitudes.

So these comparisons are by no means perfect, and they will be inaccurate within ten minutes of being written. However, it should help to give some perspective to just how reflective the market capitalization of the top cryptocurrencies is of their true worth.

The Total Market Cap of All Cryptocurrencies: $545 billion

As an emerging asset class, its common to compare cryptocurrency to long-term value stores such as gold. Many stories articles have been written on the potential growth this represents for cryptocurrency. The total current of all the gold that’s ever been mined would be in excess of $7.5 trillion US dollars, meaning cryptocurrency has some way to go before even representing a fraction of this market share.

However, if all cryptocurrencies were grouped together and listed on the New York Stock Exchange, they would be in first place by some margin. The biggest company on the NYSE is Alibaba Group Holding Limited, with a total market cap of $445.3 billion. To add some perspective, the total market of cap of all cryptocurrencies is around double that of Wal-Mart Stores Inc. ($287.68 billion) and significantly more than double Visa Inc. ($258.24 billion) and AT&T Inc. ($258.24 billion).

But cryptocurrency is valued at significantly less than NASDAQ’s biggest tech firms. Apple is top with a market cap of $893.22 billion. This is followed by two iterations of Google’s parent company Alphabet Inc., with a market cap of $741.88 billion each for both Class A and Class C shares. Counted together, Alphabet Inc.’s market cap is close to three times larger than the total market cap of all cryptocurrency.

Cryptocurrency also lags behind Microsoft ($670.01 billion). However, it would still be highly placed overall, being ranked between Amazon ($568.19 billion) and Facebook ($523.78 million).

Bitcoin: $300.38 billion

Bitcoin accounts for more than 55% of the entire cryptocurrency market. This is a long way off its peak, with Bitcoin for years accounting for between 80 and 90% of the total market. This market capitalization would place Bitcoin between Bank of America ($302.91 billion) and Wells Fargo & Company ($294.82 billion) on the NYSE. If its value keeps increasing, Bitcoin could eventually surpass entities like Exxon Mobil ($351.81 billion), JP Morgan ($368.28 billion), and Johnson & Johnson ($368.72 billion).

On NASDAQ, there is a huge drop-off from the internet giants and the next highest ranked companies. Bitcoin would be ranked comfortably ahead of Intel ($208.54 billion), with a lot of ground to make up before it surpasses Facebook ($523.78 billion).

Ethereum: $66.46 billion

There’s an even bigger gap between Bitcoin and Ethereum than there is between Facebook and Intel, although Ethereum is still far and away the second largest cryptocurrency.

Ethereum’s current market cap would place it between Chinese search engine kinds Baidu ($64.33 billion) and Disney’s recent acquisition Twenty-First Century Fox ($63.39 billion) on NASDAQ.

On NYSE, Ethereum would rank below Unilever ($68.93 billion), The Charles Schwab Corporation ($68.74 billion), and UBS AG ($67.34 billion), but above Norway’s Statoil ASA ($66.39 billion), Danaher Corporation ($65.39 billion), Canada’s Enbridge Inc. ($65.32 billion) and Colgate-Palmolive Company ($65.02 billion).

Bitcoin Cash: $30.43 billion , Ripple: $29.93 billion

Ripple is a fantastic example of just how volatile cryptocurrency market is. A week ago, Ripple’s market cap was less than $10 billion. On December 14, Ripple had a market cap of $33.68 billion!

It’s easy to imagine the pandemonium that would follow similar swings in valuation for the companies ranked around $30 billion market cap on NASDAQ and NYSE.

Both Bitcoin Cash and Ripple would be slotted below firms like Monster Beverage Corporation ($36.1 billion) and Electronic Arts Inc. ($33.65 billion) and above retail outfits like Ross Stores, Inc. ($29.03 billion) and Dollar Tree, Inc. ($25.2 billion) on NASDAQ.

On NYSE, they would be ranked between major US food distributors like Sysco Corporation ($31.78 billion) and Tyson Foods, Inc. ($29.89 billion).

Litecoin: $16.29 billion

Litecoin is another example of just how quickly cryptocurrency moves, with its market cap more than doubling over the past week. Litecoin’s current market cap would place it exactly between BioMarin Pharmaceutical Inc. ($16.34 billion) and Huntington Bancshares Incorporated ($15.76 billion) on NASDAQ.

On NYSE, Litecoin would rank beneath Dr Pepper Snapple Group, Inc. ($16.69billion), Twitter, Inc. ($16.51 billion) and Dell Technologies Inc. ($16.45 billion), but above American Water Works ($16.2 billion) and Yum China Holdings, Inc. ($15.58 billion), which holds exclusive rights to KFC, Pizza Hut and Taco Bell in Mainland China.

IOTA: $11.12 billion

IOTA’s recent movement has been even wilder than Litecoin’s, going from a market cap of just over $2 billion in late November to a high of $15.28 billion on December 6.

IOTA’s current $11.12 billion market cap would place it between Hasbro ($11.72 billion) and Garmin ($10.95 billion) on NASDAQ. On NYSE, it would be beneath Mexican media heavyweights Groupo Televisa S.A. ($11.34 billion) and above Gartner, Inc. ($11.11 billion) and Extra Space Storage Inc ($11.03 billion).

Cardano: $7.12 billion, Dash: $7.05 billion

Cardano has added more than a billion dollars to its valuation in the few hours that have passed since collecting the initial figures for this article and writing it, vaulting above Dash to become the seventh largest cryptocurrency. By the time the article’s published, it wouldn’t be particularly surprising to see it shift another billion dollars in either direction.

Cardano and Dash’s current market caps would place them below Xerox Corporation ($7.55 billion) and Macy’s Inc ($7.49 billion) and above Under Armour, Inc. ($6.7 billion) and packaged food manufacturer Pinnacle Foods, Inc. ($6.68 billion) on NYSE. On NASDAQ, they would rank between investment managers The Carlyle Group L.P. ($7.27 billion) and budget carrier JetBlue Airways Corporation ($6.83 billion).

The $4 to $6 billion Range

NEM: $5.5 billion
Bitcoin Gold: $5.05 billion
Monero: $4.97 billion
EOS: $4.84 billion

The ninth to twelfth ranked cryptocurrencies have similar market caps to a range of household name brands.

On NYSE, companies falling within this range include Herbalife LTD. ($5.84 billion), BlackBerry Limited ($5.81 billion), Six Flags Entertainment Corporation ($5.61 billion), Omega Healthcare Investors, Inc. ($5.59 billion). MID: The Madison Square Garden Company ($4.59 billion), and The Hanover Insurance Group Inc. ($4.38 billion).

On NASDAQ, these cryptocurrencies would be ranked alongside Dunkin’ Brands Group, Inc. ($5.54 billion), Logitech International S.A. ($5.5 billion), toy manufacturers Mattel, Inc. ($5.32 billion), Roku, Inc. ($5.12 billion), and TripAdvisor Inc. ($4.86 billion).

The $3 to $3.5 billion range

Ethereum Classic: $3.55 billion
Stellar: $3.46 billion
NEO: $3.14 billion

The final cryptocurrencies on this list also rank alongside some very recognizable brands.

On NYSE, this range includes Yelp Inc. ($3.51 billion), Marriot Vacations Worldwide Corporation ($3.49 billion), trucking and freight courier service BEST Inc. ($3.41 billion), Tupperware Brands Corporation ($3.28 billion), sporting giants Manchester United Ltd. ($3.21 billion), and Dick’s Sporting Goods Inc. ($3.11 billion).

On NASDAQ, these cryptocurrencies would rank alongside Urban Outfitters, Inc. ($3.55 billion), life insurance specialists American National Insurance Company ($3.29 billion), Bed, Bath & Beyond Inc. ($3.24 billion), and Groupon, Inc. ($2.95 billion).

So are cryptocurrency market caps a fair reflection of their worth?

Cryptocurrencies are of course entirely different in nature than profit-generating companies, but this list is nevertheless an insight into how much value is being ascribed to them.

While NEO has more world-changing potential than Bed, Bath & Beyond, it’s still far away from being a similarly recognizable brand. Manchester United are likely far more recognizable just about anywhere on earth than even Ethereum, yet the company behind the team has a market capitalization that is less than Stellar.

Of course, the market cap of cryptocurrencies is in constant flux, though it seems to be trending firmly upwards. The truth is that nobody yet knows how much cryptocurrency is worth. However, comparing cryptocurrency to other forms of investment should give some indication of what the current best guess is.

At the end of a wilder year than even the most confident holders would’ve predicted 12 months ago, the unpredictable cryptocurrency market threw up a final surprise with the rapid rise of DAG coins. DAG stands for Direct Acyclic Graph, the technical term for a form of ledger-settlement that occurs instantaneously and peer-to-peer, without the need for blockchain-wide confirmation. Essentially, the rapid rise of blockchain-enabled cryptocurrency in 2017 climaxed with the emergence of a technology that did away with the need for blockchain.

The two coins in question are IOTA and RaiBlocks

At the start of December, a single MIOTA was trading at $1.30, with one unit of XRB trading at $0.20. IOTA was the first to explode in value, beginning a headline-generating surge on December 3 that took it to from $1.49 to a high of $5.48 on December 6 – an almost 368% increase in just three days.

 

RaiBlocks was already rapidly gaining value before IOTA took off, doubling in value to $0.40 by December 3. But following the rapid rise of IOTA, RaiBlocks went stratospheric, growing exponentially to reach $3.51 on December 14 – an incredible 1755% rise in just two weeks.

Both coins tapered off immediately following their all-time high. IOTA dropped to $3.11 within 24 hours of hitting $5.48, and RaiBlocks dipped as low as $2.77 within a day of hitting $3.51 – a drop-off of 44% for IOTA and 21% for RaiBlocks.

The story behind the rapid ascent and volatility of these two breakout coins provides a fascinating insight into the forces, motives, and circumstances that shape the cryptocurrency market.

1. Hype is the best marketing

While many initial coin offerings (ICOs) are launched with massive marketing budgets, the teams behind both IOTA and RaiBlocks have a marketing investment of pretty much nothing. Instead, they’ve been content to let their reputations grow quietly through word-of-mouth on internet forums.

The sudden surge in IOTA’s value was sparked by an announcement that they would be partnering with major firms including Microsoft and Samsung.

RaiBlocks benefitted a lot from spillover buzz about the game-changing potential of DAG coins that followed IOTA’s rapid rise.

2. Speculation breeds speculation

The lightening-fast ascendancy of IOTA and RaiBlocks shows the incredible snowball effect that buzz surrounding a coin can have.

Early adopters started buying up these coins because of the massive potential of the underlying technology. Once their growth moved into double digit percentages, interest in each coin soared, with other investors hoping to get on board before the surge reached its pinnacle.

This phenomenon was particularly acute in the hyper-speculative South Korean cryptocurrency market. South Korean investors often complain of the Kimchi Premium levied on cryptocurrencies sold through South Korean exchanges. IOTA’s sudden raise attracted a particularly hefty premium: while CoinMarketCap lists IOTA’s recent all-time global high at $5.48, the price on South Korean exchanges exceeded $9 at its peak.

3. Sudden success can have unintended consequences

While IOTA’s surge to the top of the coin market capitalization rankings has been fueled through trade on large South Korean exchanges and the massive international exchange Bitfinex, RaiBlocks has only been available through a handful of much smaller exchanges.

If you look at RaiBlocks price chart over the past week, you see a steady rise that suddenly completely flatlines for around twenty-four hours on December 12, before an massive increase between December 13 and 14.

The reason for this sudden interruption to RaiBlocks’ surge was that both of the main exchanges carrying it went down at the same time.

The jubilation that many RaiBlocks holders felt at the sudden rise in the coin’s value quickly turned to panic as Mercatox and BitGrail stopped working. Experienced cryptocurrency traders and the teams behind RaiBlocks and both exchanges offered assurances that the coins stored on these exchanges were safe. However, the RaiBlocks subreddit was flooded with worried comments as people feared the worst.

But both Mercatox and Bitgrail were back up within a day or two of going offline. The price of RaiBlocks spiked immediately, going from $1.59 on December 13 to a high of $3.96 on December 14. But once these exchanges were back online, an influx of people looking to withdraw RaiBlocks led to delays in processing transactions. While RaiBlocks’ team and technology aren’t responsible for these delays, it is an unfortunate black mark against RaiBlocks when one of its main selling points is completely instant transfers.

IOTA has similarly been a victim of its own success, as the massive surge in demand has led to lengthy delays in processing transfers on its network.

4. FUD follows success

While Mercatox was offline, a holding page appeared in its place saying that the exchange had been the subject of a DDOS attack. Cryptocurrency is still the wild west of finance and while no culprits have been identified for knocking Mercatox offline, there are many who would benefit from stopping RaiBlocks sudden ascent.

There are two schools of thought regarding the growth of the cryptocurrency market. The first believe that a rising tide raises all ships, and that the growth of one coin provides a net benefit to almost all other coins. To people in this camp, the overall cryptocurrency market has a lot of room for growth. The teams behind different coins and projects should see each other as collaborators in a larger project that is carving out a whole new industry.

Others see cryptocurrency as a zero-sum game. One coin only prospers by directly eating into the support of another coin. If you’re of this mindset, then fast-rising coins like IOTA and RaiBlocks represent a grave threat to any coin they move past in the market capitalization rankings.

FUD is a huge problem in the world of cryptocurrency. FUD stands for the unholy trinity of fear, uncertainty, and doubt – the ultimate weapon to derail the ascent of projects in a marketplace where value is almost entirely determined by confidence in a project’s future prospects.

FUD can spread completely organically, as was the case in the fear of coin theft that followed Mercatox and Bitgrail being knocked offline.

It can also be targeted and deliberate. There are countless examples of this. If Mercatox really was taken down by a DDOS attack rather than simple server overload due to an unexpected influx of users, then this would be an example of FUD at its most malicious.

FUD can also be brought about inadvertently by the team behind the projects themselves.

5. Success means increased scrutiny

In a final sign of just how quickly things change in the world of cryptocurrency, the reputation of the team behind IOTA has spent the past few days fluctuating even more wildly than the value of MIOTA.

As new investors climbed on board and learned about the blockchain-busting genius of the Tangle, the words and actions of IOTA’s team were suddenly subject to a lot more scrutiny.

The biggest blow to IOTA’s emerging reputation was the revelation that headlines about the Microsoft announcement may have been overblown. While Microsoft and IOTA’s relationship had been characterized as a partnership, IOTA co-founder Dominik Schiener was forced to clarify that they were actually ‘participants.’

IOTA’s original announcement listed Microsoft alongside other major companies such as Cisco, Fuji, Samsung, and Volkswagen as deploying sensors that would sell data using the IOTA marketplace. IOTA never actually used the word ‘partnership’ in any of its press releases. But that didn’t stop talk of a partnership spreading like wildfire as IOTA’s price surged.

Litecoin founder Charlie Lee took the opportunity to fire shots at IOTA as it emerged that its possible to pay Microsoft to create a partnership, sardonically suggesting that Litecoin should maybe do the same.

Other criticisms levied at the team behind IOTA followed a series of comments left on Reddit by co-founder David Sønstebø. Sønstebø railed against criticism that was thrown at him on the IOTA subreddit in a manner that many other users saw as unprofessional for a high-ranking individual representing a project with a current valuation of more than $11 billion.

6. Profit-taking always follows an explosion in price

One of the golden rules of cryptocurrency is that what goes up usually dips soon after. Once any project has seen an enormous rise in its valuation, many early adopters will look to cash out at least part of their initial investment and lock in their profits. This inevitably lends to a dip.

Timing these rises and dips is an artform that can be extremely difficult to master. Those that consistently sell high and buy low can use cryptocurrency’s volatility to make an absolute killing. But for everyone who pulls its off successfully, there are plenty more who get the timing wrong and eat into their gains.

But this golden rule means that the peak is never sustained. This can causes panic among inexperienced buyers who pile in at the top and see their sure-thing investment take an immediate loss. However, it also means that even if other problems like those experienced by IOTA and RaiBlocks are avoided, the price is still going to end up dipping.

Both projects have experienced an incredible couple of weeks and they still represent a massive return on investment for those who got in early. Whether their sudden rise in popularity can lead to long-term success if anyone’s guess, but it seems foolish to take too negative a stance on two projects that have enjoyed such an incredible ascent.

When Ethereum creator Vitalik Buterin appeared on stage at the BeyondBlock event in Taipei on November 25, he took a thinly-veiled shot at a rival platform. While outlining his vision for Ethereum’s future growth and development, Buterin declared: “The Ethereum Killer is Ethereum, the Ethereum of China is Ethereum, the Ethereum of Taiwan is Ethereum… 2.0.” It was obvious to everyone in the cryptocurrency space what Buterin was referring to.

The Chinese Ethereum

NEO has never marketed itself as “Chinese Ethereum,” but that is what most Western investors have gotten used to calling it. Like Ethereum, NEO is both a cryptocurrency and a platform for decentralized apps (DApps). NEO’s Chinese origin has made it particularly attractive to Western speculators. The cryptocurrency market is red hot in China’s Far East neighbors Japan and South Korea. The Chinese government have put the brakes on China’s market, banning initial coin offerings (ICOs) and cryptocurrency exchanges. If NEO receives Chinese government approval, many predict its value will skyrocket.

NEO’s Western fans lap up news that points toward future Chinese government approval, such as NEO creator Da Hongfei being invited to a government-backed conference on the future of blockchain in China. The team behind NEO are also responsible for the OnChain project, which aims to implement blockchain technology to improve and connect almost every aspect of private and public administration. This is of particular interest in a country as large and complex as China, especially given that adoption of blockchain technology was specifically mentioned in the government’s five-year plan at the last Chinese Communist Party conference.

However, this focus on China can have its drawbacks. NEO recently hyped an upcoming announcement, which turned out to be a development contest sponsored by Microsoft. While a partnership with Microsoft would usually be big news, and it was a similar announcement that sparked the recent spike in IOTA’s value, many had expected NEO’s announcement to be related to long-anticipated government approval. In the disappointment that followed this announcement, NEO’s price rolled back from a high of $46.18 on November 18 to $33.86 on November 21.

NEO in the Second Half of 2017: Decline & Stall

NEO’s value exploded in the first half of 2017, beginning the year at around $0.14 and reaching a high of $50.33 on August 13. NEO’s summer surge coincided with a major rebranding, with NEO being the new name for the platform formerly known as Ant Shares. However, NEO has struggled to achieve the same dollar valuation since. It declined immediately following the August 13 all-time high, hitting $13.59 on September 15. NEO’s decline came at a time when rumors about a clampdown on Chinese cryptocurrency exchanges bloomed into an outright ban.

NEO has been on the rise since that mid-September low, hitting $47 on December 12. However, its worth noting that Bitcoin has seen an enormous surge in value since the summer, and Bitcoin’s performance is perhaps a better indicator of the relative strength of other cryptocurrencies than their US dollar value. So while one NEO was worth 0.01286150 BTC when it hit $50.33 on August 13, it was only worth 0.00271243 BTC when it hit $47 on December 12 – meaning NEO’s current worth in Bitcoin is almost a fifth of what it was in August.

At a time when other cryptocurrencies have performed incredibly bullishly, NEO has experienced months of stagnation against the dollar and a 475% relative decline against the price of Bitcoin. This performance looks even worse when compared to NEO’s supposed rival platform, Ethereum, which has gone from $149.80 on July 16 to $733.59 at the time of writing. But there are good reasons to believe that NEO is in a very strong position to make up for lost ground heading into 2018.

The Outlook for 2018

As a platform for DApps, NEO will live and die by the quality of applications that can be built on it. This is where things are looking very interesting going in 2018.

Red Pulse is among the highest-profile of NEO’s new offerings. Red Pulse aims to promote research into Chinese markets by rewarding such research with it’s Red Pulse token. Red Pulse’s overarching goal is to make Chinese markets more accessible to outside investors. This has attracted some major names to the project, with financial institutions using the platform including Bank of America Merrill Lynch, Commonwealth Bank of Australia, China CITIC Bank International, China Construction Bank, Credit Suisse, Goldman Sachs, HSBC, Morgan Stanley, Societe Generale, Sumitomo Mitsui Financial Group (SMFG), Sun Life Financial, and others. The business and financial news giant Bloomberg is another institution that will be using Red Pulse.

There are dozens of other DApps in the pipeline. The consumer data exchange APEX-A has huge potential, with major Chinese tech firms AliBaba, Baidu, and Tecent among its users. The NEX distributed exchange could revolutionize the way in which cryptocurrencies are traded. Ontology and The Key both utilize blockchain tech for cutting-edge identity verification and data exchange. Both are extremely promising propositions, and it’s worth noting that The Kay has partnered with IBM and MIIT. Other ambitious projects include Elastos’ attempt to create a decentralized internet, Stokit’s decentralized cloud storage, and Qlink’s decentralized mobile network.

Decentralization is a key part of NEO’s roadmap for the coming year. One of the biggest criticisms that is currently levelled at NEO is that it is extremely centralized compared to other major cryptocurrencies, with just seven nodes in operation. NEO’s team plans to expand this significantly in the coming weeks.

ProjectICO has moved their focus from Ethereum to NEO, which should lead to more high-quality project being launched on the NEO platform in the next twelve months.

While Ethereum pushed the world of blockchain and cryptocurrency forward considerably with its introduction of DApps, NEO’s focus on being the go-to platform for the emerging smart economy could push things even further. Sensitive to the Chinese government’s wariness of decentralization, NEO is fully focused on being compliance ready. NEO aims to be transparent and verifiable in a way that may be anathema to the libertarians who see cryptocurrency as a tool to free the world from governments and big finance. While this focus makes NEO less attractive to some of cryptocurrency’s hardcore long-term holders, it could be an amazing competitive advantage moving forward.

2018: The Year of NEO?

While NEO’s market momentum has been stalled since last summer, a lot of exciting developments have been occurring around the platform that put it in a great position heading into 2018. NEO will certainly be one of the most interesting projects to follow over the coming 12 months.

The value of RaiBlocks (XRB) has increased exponentially over the past month, going from under $0.10 at the start on November to a current all-time high of $1.42. This is despite RaiBlocks still only being available on the minor exchanges BitGrail, Mercatox, and BitFlip.

What is RaiBlocks? And why has its value shot up so suddenly?

Both of these questions are best answered with reference to IOTA, the innovative cryptocurrency that moves beyond blockchain to settle transactions peer-to-peer.

The biggest problems preventing mass adoption of Bitcoin as currency are slow transaction times and high fees. The more popular Bitcoin gets, the more congested its network, and therefore the more entrenched both these problems become.

There is also the additional problem of the energy-intensive Bitcoin mining process. With increasingly powerful hardware needed to mine blocks, Bitcoin poses a serious threat to efforts to combat global warming. Bitcoin mining already consumes more energy than many developed countries, and this problem will only increase as both Bitcoin’s popularity and the difficult of mining each block increases.

IOTA does away with these problems with ‘the Tangle.’ The Tangle sees all transactions recorded directly peer-to-peer and then added to the network at a convenient later time.

IOTA plans to use the Tangle to connect all manner of devices that are part of the Internet of Things (IoT). With zero transaction fees and instant transaction times, IOTA allows devices to share data instantaneously. This has proved of huge interest to technology firms, as IOTA provides a way for them to monetize the mountains of data that are generated through the IoT.

IOTA’s breakout moment came when a partnership with Microsoft was announced. After months of trading at around $0.50, IOTA hit $1 on November 27 and $5.34 on December 6. The price has fluctuated wildly in the $3 to $5 range since then, but even at the lower-end of IOTA’s new normal, it represents an incredible return on investment for those who got in at the sub-$1 stage.

RaiBlocks operates on similar principles to IOTA, creating ‘timeless’ transactions that don’t require updating the entire blockchain to be processed. Just as with IOTA, RaiBlocks allows for instant transfers, zero transaction fees, and has added benefit of being eco-neutral.

Whereas IOTA is primarily intended for machine-to-machine (M2M) transactions, RaiBlocks is almost entirely focused on being a peer-to-peer (P2P) method of transferring value.

It seems extremely likely that the surge in RaiBlock’s valuation is at least partially attributable to the IOTA Effect – investors who missed on the explosive rise in IOTA’s valuation over the past few weeks saw a chance to get in before the boom with a similar coin.

IOTA has already surged to the top of the coin market cap rankings and has spend the past few days duking it out with Litecoin for fourth on most lists. With a market cap closing in on $12 billion, IOTA is an incredible success story even by the lightening-fast standards of the cryptocurrency market.

At the time of writing, RaiBlocks is at number 55 on the ranking of top coins by market caps, with a market cap of under $200 million. As already mentioned, it has yet to be listed on any major exchanges, but has already seen a surge in its valuation. Supply of XRB is restricted to just over 133 million coins, which gives each coins’ value further room to grow against IOTA, with a total supply of almost 2.8 billion MIOTA.

Both RaiBlocks and IOTA are examples of Direct Acyclic Graph (DAG) coins, which is a short-hand for the innovative way transactions are directly and instantly recorded without requiring blockchain-wide confirmation.

The other major DAG coin currently available is Byteball, which has a similar market cap to Raiblocks but a much more limited supply of just 1 million coins, resulting in a current valuation of around $290. Byteball has seemingly similarly benefitted from the IOTA Effect, almost doubling in value from just over $150 on November 12.

Litecoin is one of the oldest cryptocurrencies in existence, being created by former Google employee Charlie Lee in October 2011. Litecoin’s name is a reference to the decreased block size compared to Bitcoin. A new Litecoin block is mined every 2.5 minutes, while Bitcoin’s blocks take 10 minutes. This allows for far faster transaction confirmation compared to Bitcoin.

Litecoin has also been ahead of the curve in adopting improvements which have been suggested for Bitcoin. Implementation of segregated witness proved hugely controversial within the Bitcoin community, while Litecoin fully implemented this transaction-quickening technology in May. Shortly after, Litecoin implemented the lightening network, another improvement which has long been debated for Bitcoin.

Virtually every cryptocurrency has made massive gains in 2017 and Litecoin is no exception. From a low of $3.76 on February 26, Litecoin value began shooting up in April, both in relation to the US Dollar and to Bitcoin. A peak of $84.72 was hit on September 1, but this was followed by wild fluctuation and a quick fall back beneath the $50 level. Litecoin finally broke the $80 barrier again on November 25 and surpassed a 0.01 BTC exchange value shortly afterward.

Litecoin’s value has shot up exponentially since then, breaking $100 on December 8 and hitting an all-time high of $164.27 less than 24 hours later. The value has receded since then, but Litecoin is still trading at above $155 at the time of writing.

While the growth of Litecoin’s dollar value is truly remarkable, it may be the breaking of the 0.01 BTC barrier that proves to be most important to Litecoin’s long-term success. Litecoin hasn’t traded at above 0.01 BTC since November 2015. The current surge in value comes at a time when Bitcoin is hitting insane all-time highs that would’ve been unthinkable a year ago. While Bitcoin has never been more valuable, its limitations have also never been more obvious.

The massive rally in Bitcoin’s valuation over the past few weeks has seen transaction fees and processing time soar. The more popular and valuable Bitcoin becomes, the less attractive it is as a usable digital currency.

Litecoin has always been lightyears ahead of Bitcoin in this regard. Long-term holders have considered Litecoin to be massively undervalued compared to other cryptocurrencies. It now looks like they may be being proven right.

Litecoin is one of the easiest cryptocurrencies to invest one. Coinbase is growing rapidly as investors across North America and Europe look to get involved with the cryptocurrency boom. Along with Bitcoin and Ethereum, Litecoin is one of the three cryptocurrencies that Coinbase allows to be easily bought with US Dollars, Euros, and British Pounds.

It’s likely that Litecoin is also benefitting from the chaos caused by the popularity of Ethereum’s CryptoKitties game. The game has proved an unexpected hit, with users spending tens of thousands of dollars for the most sought-after felines on the cat breeding game. Transfers involving CryptoKitties have completely congested the Ethereum network, massively slowing down transaction times and delaying the launch of some Initial Coin Offerings.

While Ethereum is much more than just a cryptocurrency, faster transaction times are a big advantage it has held over Bitcoin. With CryptoKitties taking this advantage away, Litecoin’s emphasis on speed has made it more attractive than ever.

Bitcoin is now increasingly seen as a form of digital gold rather than a truly liquid cryptocurrency. Litecoin is perfectly positioned to take up the mantle of the first-choice option for fast digital payments.

It’s too early to tell if the current surge in its value will be sustained long-term, but there are many who think Litecoin is still a steal at $150.

As Bitcoin’s price has set staggering new all-time highs over the past couple of weeks, many cryptocurrency enthusiasts have become convinced there’s something nefarious beneath the sudden growth. As major financial groups prepare to launch Bitcoin futures trading, many think the price could be being inflated by big-money investors hoping to make a killing by shorting a Bitcoin crash.

Another rumor that has been gathering steam involves Bitfinex, one of the internet’s largest cryptocurrency exchanges, and US Dollar Tether.

CoinDesk recently reported that Bitfinex have hired the law firm Steptoe & Johnson to take legal action against what it says are unfounded accusations designed to manipulate markets. Although Bitfinex’s statement doesn’t name any individuals directly, it’s been heavily implied who this action is targeting. The same CoinDesk article quotes Ross Torossian, a PR specialist hired by Bitfinex and Tether, as saying, “I think you can infer who”.

Every forum post and news article on the evolving situation points to the same target:  a blogger using the handle Bitifinex’ed, who has posted lengthy articles on Medium that go as far as accusing Bitfinex of being a Ponzi scheme.

These are very heavy claims and its easy to see why Bitfinex would be motivated to take legal action over them. It’s far from unusual for articles to attack different players in the cryptocurrency space. Unfounded claims and accusations have been thrown at almost every coin, development team, and exchange at one time or another. These types of attacks have become so commonplace that they’ve earned their own acronym – FUD, for fear, uncertainty, and doubt.

The cryptocurrency market is both hyper-competitive and almost completely unregulated. Huge amounts of money are exchanging hands for digital coins and tokens. Value in the cryptocurrency space is almost completely determined by trust. FUD erodes trust, harming one project so that another can prosper.

Bitfinex’ed’s articles have been widely distributed and they’ve created a lot of negativity around Bitfinex and Tether. The articles have been so widely shared that  they’ve received coverage in the New York Times, while every Reddit and forum post referencing Bitfinex or Tether attracts comments warning about the mounting controversy.

The appearance of a highly critical article in a major mainstream publication like The New York Times shows that this situation is escalating. Among the many points made in The NYT article are references to the recent Paradise Papers leak. The Paradise Papers showed that the Bitfinex’s chief strategy operator Phil Potter and chief executive Jan Ludovicus van der Velde had set up Tether in the British Virgin Isles in 2014.

Tether is supposed to add liquidity to the cryptocurrency market by allowing direct transfer to a coin that is directly linked to a supply of US Dollars. The value of one USDT is ‘tethered’ to the value of one USD.

Among the most serious accusations being thrown at the team behind Bitfinex and Tether is that USDT isn’t actually being backed 1:1 by US dollars.

Both Bitfinex and Tether have been targeted by multimillion dollar hacks,  including a recent hack which was said to have captured $30 million of USDT. But this latest hack is less severe than a hack which captured 120,000 Bitcoin last August. The stolen Bitcoin was worth more than $60 million at the time, and would now be worth magnitudes more than that.  The loss was spread out across all Bitifnex’s customers, with the exchange swapping 36% of funds held in accounts on its platform for debt tokens.

Fortune is another mainstream media entity which has weighed in on the mounting controversy. The Fortune article repeats accusation which have been thrown at Bitfinex and Tether by Bitfinex’ed and various Reddit and forum posts. Most of the concern surrounds the rate at which new US Tether is issued,  with 50 million being issued in week in November. This massive influx of Tether coincided with a spike in Bitcoin’s valuation.

Litecoin creator Charlie Lee summed up the worries of many in a Twitter post on November 30, stating: “There’s a fear going on that the recent price rise was helped by printing of USDT that is not backed by USD in a bank account.” The same Tweet ends by urging Tether and Bitfinex to assuage fears by conducting a complete audit of their accounts.

There's a fear going on that the recent price rise was helped by printing of USDT (Tether) that is not backed by USD in a bank account.

I urge @bitfinex and @Tether_to to perform a 3rd party audit to prove their reserves. Please do the right thing. Thanks.

— Charlie Lee [LTC⚡] (@SatoshiLite) November 30, 2017

Other aspects of the mounting controversy include Bitfinex’s banking difficulties. American bank Wells Fargo and four banks based in Hong Kong and Taiwan moved in April to freeze or suspend accounts and transfers related to Bitfinex, making it difficult for customers to withdraw money.

There are fears that this mounting controversy could result in a collapse similar to the Mt. Gox disaster in 2013, which led to a years-long depression in the value of Bitcoin.

With Bitcoin’s value now riding higher than ever and Bitcoin futures about to bring cryptocurrency into the financial mainstream, things could get extremely messy in the near future if the questions over Bitfinex and Tether aren’t resolved.