Bitcoin enjoyed sharp gains during the first six months of this year, rising more than 200% as the digital currency benefited from numerous tailwinds. The cryptocurrency, which started out 2019 below $4,000, climbed to nearly $14,000 in late June, according to CoinDesk data.
The digital asset finished the first half of the year at $11,139.22, returning 202% in that time, additional CoinDesk figures show.
Bitcoin volatility was relatively modest during the first quarter, but increased significantly during the second.
While the digital currency was up only 11.7% year-to-date (YTD) at the end of March, it had risen 44.3%, 131.7% and 201.86% by the end of April, May and June.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
When explaining what drove these gains, some analysts highlighted a variety of potential causes. Erik Finman, a young entrepreneur and early bitcoin adopter, listed several "key components."
"These 5 things did not exist in the first quarter and are changing the way people look at cryptocurrency," he emphasized.
Jeff Dorman, chief investment officer of asset manager Arca, also pointed to numerous factors as fueling bitcoin's recent gains.
"There was a confluence of many real macro events/catalysts that led to Bitcoin's rise," said Dorman, including "trade wars," "Flight to safety from countries with tight capital controls (China)" and growing awareness of the digital currency.
One bullish factor singled out by several market observers was increased institutional interest. This contrasts sharply with the bull run that bitcoin experienced between 2017 and 2018, which was attributed largely to retail investors.
The latest run-up "certainly has not been a retail-led rally, which is very notable for the space," said Cole Walton, cofounder of Plouton Mining and head trader at Kanos Capital Management, LLC.
"Google searches have not spiked and anecdotal accounts have confirmed the general public does not fully believe bitcoin is back yet," he added.
Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, also weighed in.
"Bitcoin price grew rather steadily in the first quarter of this year as compared to the violent movements of late because the sentiment shift was not retail oriented," he stated.
"We believe institutions were actively buying Bitcoin since it's lows late last year and retail investors only joined in once major psychological barriers were broken, namely the $10k level."
Several analysts singled out the hype surrounding libra, the cryptocurrency that social media giant Facebook plans to release. The company formally announced its intention to release this digital currency, designed to allow seamless transactions between parties around the world, on June 18th, according to TechCrunch.
Facebook's plans have provoked a deluge of media coverage, with some lawmakers calling for the social media giant to halt all development on the project. Since the company had nearly 2.4 billion monthly active users as of March 31st, it can potentially tap a very sizable market by offering its user base the ability to make timely transactions.
Dorman spoke to this, noting that the launch of this cryptocurrency "immediately introduces 2 billion people to digital wallets." Walton emphasized that if libra gets off the ground, it "will be the biggest on-ramp into crypto we have seen yet, and institutional money knows this."
Market observers also pointed to the key role that derivatives and leveraged trading played in pushing bitcoin higher.
Dipasquale, for example, described these factors as "instrumental" to the cryptocurrency's gains.
Dave Hendricks, cofounder and CEO of digital asset management platform Vertalo, also commented on this situation, emphasizing how the market has matured over time.
"During the 2017 run up Bitcoin didn't even have a futures market in place," he emphasized. "In the 18 months since the ATH, many more institutions have started following and investing in BTC," said Hendricks. "With new leverage products and a more sophisticated buyer base, it's possible for larger leveraged orders to impact the market," he noted.
One form of information that can help market observers understand bitcoin's robust gains is sentiment data. Joshua Frank, cofounder of digital analytics platform TheTIE.io, helped shed some light on this particular area.
The chart below, provided by his company, plots the sentiment (measured by collecting and assessing social media posts) of bitcoin, along with the number of tweets surrounding the cryptocurrency.
The blue line represents tweet volume, while the purple line corresponds with long-term sentiment, which is calculated by conversations on Twitter over the last 50 days to a 200-day moving average.
"Tweet volumes (blue line middle chart) have continued to increase over the last year." "Continued increases in positive long-term sentiment means that conversations around cryptocurrency are increasingly becoming more positive," he emphasized.
Frank also weighed in on libra, and how its announcement affected the sentiment surrounding bitcoin. "After Facebook’s official partner list for Libra Coin was revealed on June 14th sentiment on Bitcoin almost immediately flipped positive leading significant upwards price movement," he noted.
Going forward, he provided a rosy outlook for the world's most prominent digital currency. "Conversations around Bitcoin remain bullish and we anticipate that Bitcoin, while volatile, will continue to see upwards price movement."
Telegram, the most hyped ICO in the history of ICOs, is finally making its tokens available to retail investors through a limited listing that will precede a full sale later this year — but there are a lot of catches.
The messaging company, which serves as the de facto chat app for the crypto community, raised a record-high $1.7 billion last year through a token sale that was limited to accredited investors. The listing saw unprecedented demand despite a project which, some industry critics argued, recycled old ideas and proposed unmeetable goals.
Now its Gram token will go on sale to regular crypto buyers for the first time next month through a listing on crypto exchange Liquid on July 10. The arrangement is a limited offering before a full public sale in October, but the U.S, Korea and Japan are among countries where it will not be sold.
It’s notable that Liquid, which recently claimed to have raised funding at a $1 billion valuation, hasn’t struck a deal with Telegram directly. Instead, it has agreed to list an undisclosed number of tokens held by Gram Asia, an organization headquartered in Korea that claims to be the largest holder of Grams in Asia. For now, neither side is saying how many will be on offer and at what price.
Indeed, the press release announcing the deal includes no contribution from Telegram — there is, for example, no quote from its reclusive CEO Pavel Durov — and it sources two media reports to claim that Telegram’s beta program on its testnet is apparently working as planned.
That’s a pretty strange situation, even for the world of crypto, since it is convention for companies to endorse sales and partnerships.
“Unfortunately, that’s Telegram and how they have operated from the beginning,” Liquid CEO Kayamori told TechCrunch in an interview this week.
Kayamori said that TON is on track to make a full launch as early as October and that this partial listing from Gram Asia is part of that overall strategy.
Sure, that’s the rhetoric, but it is easy to assume other reasons behind the sale. Such as that Gram Asia is cashing in on anticipation of the full launch or, worse, that the group is dumping its tokens before a product.
Kayamori claimed that isn’t the case.
“A public sale was always planned for the window between the testnet launch and mainnet [full] launch,” he said. “They wanted to work with a regulated exchange to see how it goes before it gets listed [in full] in October.”
“Telegram already has an ecosystem, developers and early token buyers and TON ventures, there are already communities being built up. Based on discussions within these communities, GRAM Asia has put its best step forward to do this public sale,” Kayamori added.
The “regulated” part is important.
One of the reasons Telegram kept quiet during the token sale was to avoid running into legal problems, such as those that fellow chat app Kik is experiencing right now. That caused plenty of issues at the time — with scammers cashing in on demand and token buyers themselves left confused — and the approach means there are many caveats around the sale on Liquid.
Most notably, the Gram tokens will not be tradeable.
Buyers will essentially buy tokens from Gram Asia which, until the tokens are released in October, will be held in USDC — the stable coin backed by Coinbase among others. Only when the distribution process begins will the buyers receive their tokens, but the process itself will be divided into four tranches with one-quarter of the buyer’s tokens distributed every three months.
Kayamori conceded that there may be unofficial over the counter trading, but Liquid “can’t control” that.
The exchange will require rigorous KYC for prospective buyers, and there is a significant list of countries where Gram tokens will not be sold, and that includes the U.S. and Japan.
Liquid doesn’t have anything like the volume of top exchanges Binance, OkEx and others that do more than $1 billion in trading daily — Coinmarketcap data ranks it 83rd with over $900 million traded over the last seven days — but it tries to stand out with a focus on regulation. That’s to say that it adheres to regulation in markets like Japan, the bet being that some companies will prefer that approach for their token sales or buying.
That’s worked in terms of this deal with Gram Asia, but it remains to be seen whether it can go from a splashy partnership to one that actually drives significant trading, user engagement and new sign-ups.
For Telegram, the Liquid listing will be an early but limited look at the market’s appetite for its token.
It’s no secret that the cryptocurrency market cap has grown faster than the broader crypto industry. This means that the options for tools to help hold, track and manage your cryptocurrency are still pretty slim.
CoinTracker is one of the recently launched startups trying to help. Part of YC’s Winter ’18 class, it’s a platform to track your crypto across all exchanges, wallets, and even currencies. Today most crypto-enthusiasts try to do this using complicated and bloated Google spreadsheets. But that only works if you’re meticulous about recording each transfer and trade and have been so since you made your first crypto purchase.
CoinTracker tries to automate this process. You start by connecting its to every exchange you use (they currently support 13), but can also add the public address to any wallet that holds Bitcoin, Ethereum, Litecoin and Dogecoin and it will automatically read the balance and update it in your portfolio. If you hold other coins (they support and pull prices for 2,000+) you have to enter those manually, inputting how much you paid for them and on what date.
Having its hands in all of this transaction data allows CoinTracker to essentially detect when you transfer crypto between different exchanges or wallets, which means it can keep track of the cost basis and capital gains of your whole portfolio, regardless of where your crypto is being held.
Keeping track of cost basis and capital gains allowed CoinTracker to create another sought after feature, which is the ability to optimize tax filings by computing capital gains reports using FIFO, LIFO or HIFO accounting.
This tax feature launches today, starting at $29.99 for a tax report of less than 100 transactions and pre-populated IRS Form 8949, all the way up to $999.99 for unlimited transactions including prior years. The existing features, which are syncing with exchange wallets, showing you your performance over time and collating your transaction history into one list will remain free for anyone to use.
The service is by no means perfect, especially for those of us who have been involved in crypto since before 2017 and have transactions and coins scattered across dozens of exchanges (some of which are now shut down). It’s also missing a few key features depending on which exchanges you link – for example, Gemini doesn’t provide CoinTracker with withdraws or deposits, meaning your cost basis history is a little out of whack.
But it’s a good start, and likely will be near perfect if you’re an average crypto investor who got involved sometime in 2017 and only have a few different currencies across a few major exchanges.
The site also has a price list of the top 100 coins (basically an alternative to coinmarketcap.com) and is working on an investment offering where users can invest in a basket of the top cryptocurrencies.
CoinTracker’s tax feature launches today, and you can check it out here.