Weekly Cryptocurrency Commentary

Last week, we had cautioned again that crypto prices might be due for a correction considering the decline in trading volume in the previous week. Our forecast turned out right, as the global MCAP of cryptos declined 9.56% WoW. As global crypto trading volume was up 21% WoW (Bitcoin’s volume was up 4%; Ethereum was up 15%), we are expecting crypto prices to rise this week.

 

Source: Coinmarketcap

Performance of Select Cryptos

Price of mainstream/popular cryptos were down 4% on average last week.

Source: FRC / Yahoo Finance

Companies operating in the crypto space are trading at an average EV/R of 16.6x (previously 22.6x).

Source: S&P Capital IQ/FRC

 Key sector developments are listed below (all positive):

  • Deloitte announced a partnership with Ava Labs, the developer of cryptocurrency Avalanche (AVAX), to use their blockchain to improve Deloitte’s cloud-based products. We believe this deal shows the tremendous utility/value of the underlying platforms of crypto companies.
  • MoonPay raised US$555M at a US$3.4B valuation from hedge funds. MoonPay allows users buy cryptos using conventional debit cards, credit cards, Apple Pay (NASDAQ: AAPL), Google Pay (NASDAQ: GOOG), and Samsung Pay (KOSE: A005930).
  • Cryptocurrency “Crypto.com” announced they bought the naming rights to the Staples Center, for $700M over a 20-year term. We note that such marketing initiatives bring more mainstream visibility to the sector.