Crypto Market Forecast: February 3rd

It was a strong trading week in the crypto markets with most leading large-cap assets rising by over 10%. The top asset on Brave New Coin’s market cap table, Bitcoin, grew ~10% and now hovers near the $9,500 price level. The number two and three crypto assets on Brave New Coin’s market cap table, Ethereum, and XRP grew ~15% and ~12% respectively. The overall market cap for crypto grew by ~11%, adding US$ 25 billion during the week.

Bitcoin and Gold have both performed well in the first weeks of 2020. Investors in the traditional markets have been spooked by panic selling following the outbreak of the Coronavirus. Bitcoin and gold are considered to be hard, non-government safe-haven assets that perform well during periods of global macro uncertainty.

Bitcoin’s inherent value would likely be unaffected by any quarantine measures implemented by the Chinese and other international governments. Miners who contribute to the hashrate of the Bitcoin network can do so from anywhere cheap electricity is available.

This is unlike many equity or commodity investments in the traditional markets that rely on China’s global supply chain. Meanwhile, the US stock market has enjoyed an extended bull run through most of 2019. Many investors may view the Coronavirus driven price pull-back as an end to this rally. This suggests short term buying pressure for Bitcoin and other hard assets as investors seek temporary safe havens from the uncertainty of the international equity and commodity markets.

The Coronavirus, however, is beginning to show signs that it will have an impact on Bitcoin’s fundamentals. Popular ASIC chip maker MicroBT published a notice on WeChat 4 days ago announcing that there would be a delay in the delivery and after-sales of recently ordered products.

The announcement cited a decision made by the Guangdong provincial government to extend the Chinese New Year holiday by an additional week. Other major Chinese ASIC Chinese chip makers Innosilicon and Bitmain also announced that there may be delays in deliveries caused by Chinese New Year holiday extensions caused by the outbreak.

Another factor driving this week’s crypto market rally may be investors gearing up for the upcoming Bitcoin block reward halving. The halving is a key event on the macro calendar for Bitcoin and it happens just once every four years. It will reduce the supply of new bitcoins into the system and over time it is likely to increase the intrinsic value of circulating bitcoins. Brave New Coin has released a Bitcoin halving page that curates key information surrounding the event.

This week in crypto

4th February- Bitcoin-SV return to Genesis Update

The controversial Bitcoin SV network releases a major update this Tuesday, designed to return the network to a state designed to closely resemble what the Bitcoin (BTC) blockchain looked like in its genesis form over 11 years ago. The update will sunset P2SH transactions that were added to the network in 2012 and restores OP_return transactions. Bitcoin SV has risen a significant 176% in the last month displaying significant alpha compared to assets with similar market caps.

Market cap top 10

It was an excellent week for assets in Brave New Coin’s market cap top 10 with all assets enjoying healthy gains. Litecoin(LTC) and Cardano(ADA) had particularly strong weeks. Cardano co-founder, and CEO of IOHK, Charles Hoskinson announced last week that the network has agreed to a partnership with PWC to build a new commercial strategy for the project. The deal appears to have galvanized an already bullish ADA token community.

Following an excellent start to last week, when the price of BTC rocketed from ~US$8600 to ~US$9390, the price has hovered in a range between ~9350-950. With the price of BTC appearing to be stuck in this range even after the weekly close, a number of analysts are suggesting that altcoins may represent better short term upside than BTC.