XRP Sales Doubled in the Third Quarter, XZC, SC Analysis Oct. 26Oct 26, 2018, 9:37AM
Ripple’s Q3 Markets Report shows that XRP sales doubled for the quarter. Zcoin and Siacoin tackle the threat of big mining.
Ripple have released their Q3 2018 XRP Markets Report where it was noted that XRP sales had doubled over the period. The details of the report showed that XRP total sales grew from $73.5 million to $163 million. The large majority of this gain can be attributed to “institutional direct sales”.
Ripple’s report also highlighted that Wall Street firms had taken early steps to providing custody services for digital assets. This statement refers to the recent activity by Fidelity Investments in particular, who have taken concrete steps to provide custody platforms, which will be live by year-end. The higher institutional demand for XRP has created the price spike seen from September and Ripple knows that solid custody offerings by reliable financial institutions would boost demand further.
The report also showed that XRP’s price had underperformed the general market from July to early-September, before the price rallied on the xRapid product release. An interesting chart was provided in the Geographic Trends section:
It was noted that South Korean exchanges had emerged as a leading venue for digital assets. This is likely related to the uncertainty that has been growing in emerging markets and the Asian economies. Chinese stocks for example, have china stocks in market cap in 2018 as fears over the trade war with the U.S. have increased. With the cryptocurrency ban in China, the market has lost a significant amount of potential volumes. The other surprise was that two-thirds of digital asset trading came from Malta. Although Malta have been a big adopter of blockchain, which has seen the European country dubbed, “Blockchain Island”, the nation only has a GDP of $12bn. This development highlights that volumes have stagnated amongst the early-adopters of crypto and the market desperately needs new volumes from larger nations and financial institutions before there is significant growth.
The price of XRP on the weekly chart has been disappointing as the coin failed to see follow-through on the xRapid rally and has made no real attempt to attack the recent highs and the 50 moving average. Despite this, the September rally is still technically supported and the market can still push higher from here.
ZCoin has moved 15% higher this week as the coin seeks to carve out a low in the price. XZC has announced a hard fork which will activate on the 10th December and will incorporate the Merkle Tree Proof (MTP) proof-of-work algorithm. The development team have stated that the goal of the MTP is to,
…level the playing field between people with lots of computing power (i.e., large-scale mining farms) and those with little power (i.e., home miners). In other words, Mining for The People.
Crypto mining is currently dominated by large players with specialized equipment, which centralizes power in the hands of the few. Zcoin released the first version of MTP on their testnet in May. After further testing and development, it will now go live in December.
Price for Zcoin has found support at the $10 level and is now seeking to push above resistance to attempt the $15 and $20 levels. Zcoin still has work to do if it wants to see the $50 levels last seen in May-June of this year.
Another coin that was heading for a hard fork was Siacoin. The community decided against the move and instead, the Sia Core Team have decided to reset the Sia Proof-of-work function. Announced by project founder David Vorick, he summed up the reasons for move that were largely related to Bitmain’s entrance,
A majority of Sia’s core contributors and biggest supporters had put large sums of money towards the community ASIC, and many viewed the sudden entrance by Bitmain as a direct attack on the community, believing the best course of action was a decisive hardfork to brick the Bitmain machines but protect the Obelisk machines.
Bitmain would be allowed to stay and mine on the network, which brought some pessimism to parts of the community and as with the Zcoin example previously, it shows the disruption that large miners can create for projects.
Vorick talked further about the economics of ASICs, where he said,
…the ASIC business is risky, profit targets are typically between 2x and 10x the initial investment. For a $6 million initial investment, the expected gross margin on the machines will need to be between $12 million and $60 million. Before development ever even starts, a market opportunity of tens of millions in margins needs to be present.
Siacoin is up around 12% over the last 7 days and is testing resistance near the $0.0075 highs of early October. If SC can trade above this level, there is previous support-turned-resistance at $0.0093 ahead of an ultimate test of the $0.0100 mark.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.