Weekly Cryptocurrency Commentary

The global MCAP of cryptos is US$2.80T, down 2.84% WoW, and up 518% YoY. Global crypto trading volume was down 18.5% WoW. Last week, we had cautioned that crypto prices might be due for a correction due to lower trading volumes in the prior week. Considering that trading volumes continued to decline, we speculate that crypto prices might be due for another correction this week.

Performance of Select Cryptos

Prices of mainstream/popular cryptos were relatively flat last week.

Source: FRC / Yahoo Finance

Companies operating in the crypto space are trading at an average EV/R of 22.6x (previously 20.2x).

Source: S&P Capital IQ/FRC

Key sector developments are listed below (mixed developments):

  • Coinbase Global’s (NASDAQ: COIN) Q3 earnings missed consensus revenue estimates by 17%. COIN’s results provide us market insights as they operate the largest crypto exchange in the U.S. Q3 revenue was down 39% QoQ amid a 29% decline in trading volume, and a 16% decline in active users. We were not surprised with these results as global crypto trading volume was also down in Q3 due to weaker prices. That said, COIN was able to grow its user-base by 7%, which we believe is a key indicator/predictor of the sector’s ability to become mainstream.
  • A Deputy Governor of The Bank of England urged regulators to take action on cryptos. We note that governments worldwide are implementing stricter restrictions on cryptos.
  • On a positive note, Tim Cook, the CEO of Apple Inc. (NASDAQ: AAPL), said he personally owns cryptos, though he did not specify which crypto(s) he owns. We believe endorsements from high-profile individuals are promising for the sector.