ICO and cryptocurrency market analysis for the first half of 2018 | Digital Rating Agency

ICO and cryptocurrency market analysis for the first half of 2018

09.07.2018

ICO and cryptocurrency market analysis for the first half of 2018

Analysts of the Digital Rating Agency has analyzed the situation on the cryptocurrency market, as well as the most significant news and important trends that has been influencing the market.


The crypto market was in a downtrend for almost all half of the year with the exception of February and April - the only periods when the market showed signs of slight recovery.


Bitcoin price decreased by 64.45% during the first half of the year. Ethereum price fell by 67.73%. It is noteworthy that the composition of the traditional five leaders in terms of capitalization has changed - the EOS project ousted Litecoin from the fifth line, it almost doubled the capitalization of Litecoin by the end of the half-year.


The ICO market has been showing an increase in the amount of raised funds by 110.2% compared with the previous half-year, according to ICO GLOBAL MARKET STATS. Such an impressive gap was provided mainly by EOS and Telegram, that managed to attract more than $ 5.7bn. The total sum of all projects for the first half of 2018 was $ 17.4bn. The number of conducted ICOs also increased by more than 30% compared to the previous half-year. The greatest interest of the audience was traditionally caused by infrastructure projects, projects related to trading and investments, projects from the category of finance and communications. The general increase in the number of raised funds and number of ICOs says that many people continue to be optimistic about this industry despite the protracted decline in the market.


An important negative trend for the first half of the year was the frequent occurrence of "51% attacks" successfully conducted in the Bitcoin Gold, Litecoin Cash, Verge and Monacoin networks. In the last week of the first half of 2018, The BTC.com and Antpool mining pools produced 25.5% and 16.5% of blocks in the Bitcoin network, respectively, according to CoinDance. Given that both of these mining pools are owned by Bitmain, the world's largest manufacturer of integrated circuits for mining, it can be stated that Bitmain took control of about 42 percent of the Bitcoin network’s hashrate. This level is dangerously close to controlling a 51% of hashrate, which theoretically will allow Bitmain to attack the Bitcoin network to its advantage.


Hacker attacks on crypto exchanges also began to be perceived as something quite ordinary - more than 10 exchanges were attacked for over half a year, including even the largest and authoritative ones: Binance, Bitfinex, Bithumb and YoBit. Different types of malicious software are also not standing still: hidden miners, the number of which have increased 40 times this year, programs that monitor Windows clipboards to intercept addresses, phishing attacks - all this things are developing even more rapidly than the market itself.


A positive trend was the move towards the emergence of exchange-traded funds focused on Bitcoin (ETFs). Recently, the SEC announced that it is considering changes to the rules previously prohibiting the listing of Bitcoin ETFs on exchanges. Many experts are sure that the main driver for the next medium-term rally in Bitcoin's price should be the inflow of institutional investors, that will become possible due to the emergence of cryptocurrency ETFs.


An important factor was the introduction of blockchain technology into traditional business. As one of the most significant examples we can mention the project of Pavel Durov Telegram, which, if successfully launched, can become more than infrastructure project for the existing blockchain communications, as Facebook was for the Internet in its time. This will be the first large-scale project, where the successful non-blockchain app (Telegram messenger) will go to the crypto side.


Another growing trend was the emergence of a large number of "stable coins", the value of which is tied to a real asset, for example, to the US dollar or gold. Such cryptocurrencies help investors to deal with increased volatility of the market.


The US Department of Justice, the Securities Commission and the North American Association of Securities Administrators increased their activity with respect to the cryptocurrency market and conducted a number of fraud investigations in the field of cryptocurrency and ICO. This indicates the development of market regulation in the US, that should positively affect the attitude towards the industry of other developed countries.

Read below about the reasons that influenced the dynamics of the market in the first half of 2018 in the semi-annual report of Digital Rating Agency’s (DigRate) analysts.


The general dynamics of the cryptocurrency market (from 01.01.18 to 30.06.18)


The crypto market was in a downward trend almost the whole half-year. The total market capitalization decreased 3.3-fold as of June 30, 2018 from its maximum value of this half-year of $ 831,389, registered on January 7, and amounted to $ 247.871bn. The most significant drop occurred in January and early February 2018, after which the market tried to recover twice, but could not overcome the $ 500bn mark, and the total capitalization fluctuated in the $ 250- $ 500bn corridor.




*Provided by coinmarketcap.com


Bitcoin's market capitalization decreased by 2.7 times: from $ 291.444bn to $ 106.474bn.

Altcoins market has also been showing negative dynamics, mainly moving synchronously  with the capitalization of the most popular cryptocurrency. It is worthwhile noting here that, at the time of sharp acceleration of Bitcoin dynamics, majority of altcoins showed faster rates of decline or growth, since altcoins are more sensitive to changes in market conditions.

The total altcoins capitalization (excluding Bitcoin) decreased 3.9 times: from $ 551.926bn (Jan. 7) to $ 141.396bn. The dynamics of the decrease in altcoins capitalization outperformed the corresponding dynamics of Bitcoin by 11%. This clearly demonstrates that the price of top altcoins is more vulnerable to market conditions than Bitcoin price.




*Provided by coinmarketcap.com


The DRI index (market capitalization index, cleared of "dead" and non-traded coins) decreased by 3.2 times from its maximum value of  $728bn (07.01.2018) to $224bn (30.06.2018).




*Provided by DRI DigRate


The price of the dominant currency, Bitcoin, declined by 64.39% during May (from $ 17,462 to $ 6218). The second price on capitalization, Ethereum, decreased by 67.73% from $ 1412.12 to $ 455.68. It should be noted that Ethereum demonstrated a higher rate of decline compared to Bitcoin.



*Provided by coinmarketcap.com


Bitcoin dominance increased by 5% (from 37.96% to 42.96%). The Ethereum dominance index also increased by 5.46% (from 12.20% to 17.66%).



*Provided by  coinmarketcap.com

The increase in the popularity of Bitcoin and Ethereum compared to altcoins makes it clear that investors are more likely to trust already established currencies, that are less exposed to changes in market conditions at critical moments.


Тоp 10 gainers and losers


The top 10 gainers and losers were determined during the first half of 2018. The statistics took into account projects that are less than half a year. For such projects, the ICO price was taken as the initial price.


Top 10 gainers:


Project

Ticker

Price (01.01)

Price (30.06)

Half-year ROI 

Ontology

ONT

0.2000

3.3666

+1583.3%

Zilliqa

ZIL

0.0081

0.0669

+725.54%

Wanchain

WAN

0.3219

2.0837

+547.24%

Seele

SEELE

0.0324

0.1993

+514.99%

Databits

DTB

0.0666

0.3985

+498.29%

Matrix AI Network

MAN

0.0894

0.4590

+413.2%

ClearPoll

POLL

0.1300

0.5614

+331.86%

Credits

CS

0.0700

0.2983

+326.16%

Sp8de

SPX

0.0100

0.0400

+300%

IUNGO

ING

0.0100

0.0392

+291.88%

*Provided by ICO GLOBAL MARKET STATS



Top 10 losers:


Project

Ticker

Price (01.01)

Price (30.06)

Half-year ROI 

Landcoin

LDC

53.0000

0.0020

-100%

Aurora

AURA

3390.3200

0.0532

-100%

AB Chain

RTB

318.4249

0.0600

-99.98%

BitBase

BTBc

1.0000

0.0005

-99.95%

Royal Kingdom Coin

RKC

5.9253

0.0058

-99.9%

Pundi X

PXS

2.1900

0.0033

-99.85%

Fitrova

FRV

0.0051

0.00001

-99.83%

Voise

VOISE

1.7700

0.0041

-99.77%

Bolenum

BLN

0.7243

0.0025

-99.66%

SyncFab

MFG

2.1000

0.0075

-99.64%

*Provided by ICO GLOBAL MARKET STATS



Important news of the first half of 2018


The news background was rather positive despite the market drop. There has been visible trend of increased popularity of cryptocurrencies in Asia. The rhetoric of the financial regulators of China, South Korea, Thailand, Taiwan and Japan regarding cryptocurrencies became more and more positive throughout the year. For example, the development of ICO legislation began in South Korea, and a regulatory framework came into effect in Thailand, where the tax authorities abandoned the previously introduced VAT on individual holders of cryptocurrencies.


Many large corporations are beginning to introduce blockchain technology into their business processes. Rothschild with a 200-year history of investment banking announced the creation of its own blockchain with IMMO cryptocurrency at the end of May. Gazprom Neft PJSC and Gazprom Neft Supply LTD have implemented blockchain technologies in the logistics system with the participation of the BI_Platform team. Mastercard refused to work with anonymous Dash, Monero and ZCash cryptocurrencies in March. Representatives of the company explained this decision by the need to monitor transactions. But at the end of the half-year Mastercard patented the technology of anonymous payments on the blockchain. Earlier, Mastercard also patented the blockchain system of protection of coupons and a method that increases the efficiency of data transmission. Samsung introduced the technology of the distributed ledgers this year for the tracking system of components supplies. This will help reduce costs by 20% and accelerate the supplying process by increasing efficiency, according to the head of the company’s IT department.


One of the leading news story of the half-year was an investigation of manipulations with Tether cryptocurrency conducted by John Griffin and Amin Shams, professors of the University of Texas. Market makers used Tether tokens for artificial bitcoin price pumps in 2017. The professors cite the dynamics of the Bitcoin price in the last few months to prove their point. This year’s sharp changes in the price almost coincide with the release of USDT coins. So firstly, there is a release of a new unbacked by dollar Tether coins to support the Bitcoin price, and then the cryptocurrency is for a new replenishment of the company's dollar reserve. Previously, Tether was repeatedly blamed for non-transparent emission of new tokens. The company got on the radar of the CFTC in last December. The regulator intends to open an investigation into USDT's linkage to manipulation at the Bitfinex.


Another biggest headline was the purchase of GitHub by Microsoft Corporation. The platform for developers was purchased  for $ 7.5bn. The news has revived the crypto community, and the main developer of Bitcoin Core Vladimir Van Der Laan hurried to make a comment on this matter. He said that this event is "the beginning of a long and painful way to decline" and now developers need to look for another place, except GitHub. The company recorded an unprecedented growth in the number of projects leaving GitHub immediately after the news.


More detailed information on important news of the first half of 2018 is in the table at the end of the review.



ICO market analysis for the first half of 2018


1002 ICO were finished, 279 (27.8%) of which failed to collect the softcap, and another 140 (13.9%) was in the Dead category: these are projects that do not have a running website, or projects whose leaders were prosecuted or are now under investigation on fraudulent activities.The amount of raised funds was $ 17,420bn, $ 2,448bn of which belong to Dead projects.


The number of ICOs and collected funds for the second half of 2017 and the first half of 2018:

Index

01.07 - 31.12.17

01.01 - 30.06.18

Total ICOs / $ million

769/8 284

1002/17 420

Active / $ million

262/7 010

583/14 480

Failed / $ million

219/-

279/-

Dead / $ million

288/1 274

140/2 940


Compared to the previous half-year, the number of ICOs was more for 233 projects (30.2%), and the amount of collected funds was more by $ 9,136bn (110.2%). Such statistics show that despite the fall in the total capitalization of the market, many people are still optimistic about its potential.


Тоp 5 gainers of the first half of 2018


Five major projects collected more than $ 5bn in the first half of the year, 40% of which ($ 2bn) were collected by the EOS project (an infrastructure platform for creating and managing decentralized apps). Its ICO lasted a year, during which about $ 4 bn were raised. For the convenience of calculations, ICO EOS was divided into 12 stages per month, and the raised funds were distributed over the months.





Project name

Ticker

Raised, $million

EOS

EOS

2000

Telegram

GRAM

1700

Petro

PTR

735

TaTaTu

TTU

575

Dragon

DRG

320

Raised in total by top-5


5330


The second place with a result of $ 1,7bn is occupied by communication project Telegram collected the necessary amount as a result of two closed placements without going public. The national currency of Venezuela El Petro with confirmed raised funds of $ 735M is on the third place. Next comes the TaTaTu media platform with record collections of $ 575M. Dragon cryptocurrency closes the list of leaders with collections of $ 320M. Five gainers collected $ 5.033bn, which is slightly less than one-third of total raised funds for the half-year.


Тоp ICO categories





*Provided by ICO GLOBAL MARKET STATS, coinschedule.com, icodrops.com



The leading categories: Communication ($ 2030M) - the category is the leader due to the inclusion of the Telegram Open Network (TON), which collected $ 1,7bn; Finance ($ 1,775M); Trading / Investments ($ 1,249M); National cryptocurrencies ($ 735M); Entertainment / Activities ($ 591M); Games / Virtual Reality ($ 582M); Infrastructure ($ 540M) *; Commerce / Advertising ($ 510M); Payment systems ($ 509M); Transportation / Logistics ($ 341M).


* Infrastructure category figures are shown excluding EOS


Top categories by the number of conducted ICOs


*Provided by ICO GLOBAL MARKET STATS


Most of the ICOs were conducted in the category of Trading / Investments (258 projects). A little less popular was the category of Cryptocurrency (235 projects). Then comes the Entertainment / Media category with 197 projects. These projects are followed by  the category of Finance with 178 projects. The top five is closed by the Infrastructure category with 151 projects.


Top 5 ICO projects by category *:


Category

1

2

3

4

5

Communications

Telegram (1700)

Hdac

(258)

iungo

(46)

indaHash

(42)

Mobius

(39)

Finance

Bankera

(150)

Basis

(133)

U.CASH

(84,9)

BANKEX

(70,6)

Zeepin

(62,6)

Trading / Investments

Huobi Token

(300)

Dropil

(60)

Tradove

(52)

GoldBitsCoin

(50)

HybribBlock

(47,8)

National

cryptocurrencies

Petro

(735)

-

-

-

-

Entertainment / Activities

TaTaTu

(575)

Theta Token (20)

Aventus (18,7)

Lympo

(16,9)

Vice Industry Token (15,1)

Games / Virtual Reality

OKOIN

(39,5)

RedBux

(38,5)

Refereum

(32,3)

Play2Live

(30)

CEEK

(17,3)

Infrastructure

Orbs

(118)

ArcBlock

(45)

Endor

(45)

YGGDRASH

(40)

0chain

(39)

Commerce / Advertising

LeadCoin

(50)

Shopin

(42,5)

Helbiz

(38,6)

DATA

(38)

Current

(36)

Payment systems


Flashmoni

(72)

FuzeX

(36,2)

Havven

(30)

Open Platform(30)

Bezant

(27,5)

Transport / Logistics

HYCON

(50)

XYO Network

(40,6)

Merculet

(28,6)

AIRCOIN

(27,9)

PCHAIN

(26,6)


* Fifures are indicated in US dollars millions. Infrastructure category figures are shown excluding EOS.



Regulation of the ICO




*Provided by itsynergis.ru


This image demonstrates the attitude to cryptocurrencies and ICO and their legislative regulation in different countries. Light-green countries are countries where cryptocurrencies are legalized, dark green means favors of regulators, black is generally positive, blue is generally negative, light-blue is sharply negative attitude towards cryptocurrencies and ICO.


Regulators treated cryptocurrencies as the abode of users of darknet and criminal structures for a long time. But after the boom in 2017, when the industry began to grow exponentially (by the number of projects, miners, crypto exchanges, investment funds and ICOs), and a wide range of investors got access to the tokens, it became obvious that one can no longer stand aside. Nevertheless, the state regulation of cryptocurrencies in different countries varies considerably. The good news is that in the world's leading countries the legislation is more favorable, since there is a demand for cryptocurrencies among the population and there is a corresponding institutional base in such countries.


A favorable legal framework for cryptocurrencies has been established in Japan, the United States, Canada and in most European countries. The picture is completely different in South America. The State is negative about cryptocurrencies in all South American countries, except Argentina. Argentina does not follow the general course thanks to President Mauricio Macri, known for his support of Bitcoin. Regulation of the cryptocurrency in the Asian region varies from country to country. Pakistan preferred to wait and not yet create a legal framework for cryptocurrencies. Financial organizations are prohibited from working with companies associated with crypto environment due to corruption scandals In Taiwan. The government of Vietnam prohibited organizations and individuals involved in e-commerce from accepting Bitcoin and other cryptocurrencies in April. The development of fintech projects that will help build the first Islamic financial system is discussed in Malaysia, therefore, the cryptocurrency has good prospects in this country. The authorities of Singapore are known for their well-thought-out position: the National Payments Council and flexible legislation permitting the licensing of circulation of cryptocurrencies are created in the country. The regulatory framework came into effect in May in Thailand where the tax authorities abandoned the previously introduced VAT on individual holders of cryptocurrency. Five regional banks are launching a pilot project of a retail payment system on a blockchain in the Philippines. In South Korea, which accounts for about a fifth of Bitcoin's turnover, the government recently opened a new structure and guidelines for regulating crypto and ICO. Basically, the new rules relate to AML requirements and the KYC for crypto exchanges. It is worth noting that the authorities of South Korea managed to change their point of view regarding the ICO to the diametrically opposite one - a total ban was imposed on the ICO at the beginning of the year.


As for Russia, the State Duma passed a bill on digital financial assets, according to which such assets are not recognized as legal means of payment on the territory of the country. The bill allows exchanging tokens for rubles and another currency solely through digital asset exchange operators. Operators can only be brokers, dealers and legal entities that act on trust management. A list of other exchange transactions, their order and conditions, will be determined by the Central Bank.


Scam of the half-year


  1. Pincoin and iFan (Vietnam) - from $ 100 to $ 660 million. Two ICOs were conducted by one Modern Tech company classified as a multi-level marketing scam. 32 000 investors were affected.

  2. Centra Tech (USA) - $ 32 million. Multilevel marketing based on the investment program. Robert Farkas and Raymond Trapani, founders of Centra Tech Shoomb Sharm,  are accused of misappropriating $ 32 million "obtained by selling unregistered securities" by SEC.

  3. ZeroEdge The online gambling operator ZeroEdge announced the second round of its ICO, despite a lot of reports on fraudulent activities and an investigation on Medium.com, that shows clearly that the casino itself and Zerocoins are fraud.

  4. Wind Wide Coin — Texas State Securities Board banned the activities of the cryptocurrency investment project Wind Wide Coin. The company has attracted potential investors with fake recommendations and support of famous people: actress Jennifer Aniston, Prince Charles and former Prime Minister of Finland M. Vanhanen.

  5. Envion — the project is suspended, and the team sues M. Woosterman, CEO, because of fraudulent diversion of all project assets. ICO has attracted $ 100 million  In January 2018. The CEO, secretly conducted additional emission of tokens using his powers, took personal control of all project’s bank accounts and disappeared.

  6. HoweyCoin — the US Securities and Exchange Commission announced its plans to issue its own cryptocurrency and launched a website to promote fraudulent ICO HoweyCoin. It is assumed that such "teachings" will allow investors to identify fraudulent ICOs better.

  7. ShipChain — the ShipChain token exchange rate has come down due to the statements of the Attorney General's Office of South Carolina that the company is obliged to stop distributing "unregistered investment contracts" that violate the securities law.

  8. Bitcoin Gold — an unknown group of miners managed to conduct a "51% attack" within the Bitcoin Gold network (BTG) to steal funds from crypto exchanges.

  9. Verge the SuprNova mining pool reported that the Verge cryptocurrency’s blockchain also became  a victim of "51% attack" and because of this all the correct blocks are rejected. According to their information, the problem affected all the pools and all miners, since the attacker controls the entire Verge blockchain.

  10. Litecoin Cash — as the Litecoin Cash team reported, they quickly reacted to the "51% attack" by contacting exchanges and asking to increase the number of confirmations in the network to 100, that complicated the actions of intruders to seize control of the network. At the moment, the damage caused by the attack is unknown.

  11. Titanium Blockchain Infrastructure Services the SEC received a judicial authorization to freeze the accounts of Titanium Blockchain Infrastructure Services Inc., which managed to raise $ 21M during the ICO. Company’s President Mike Alan Stolleri is accused of false allegations of partnership with the Fed, PayPal, Verizon, Boeing, Disney and a number of other well-known firms.

  12. Turcoin — according to reports in local media, the Istanbul-based company Hipper Inc. has attracted investments through the launch and sale of the national cryptocurrency Turcoin. Launched by Mehmet Aydın and Sadun Kaya as a "competitor to bitcoin" the company attracted the attention of Turkish celebrities. The company promised customers a monthly income of 250 Turkish liras for investments of 1500 lire and an annual income of about 3000 before executives fled the country with depositors' funds. Another partner of Hipper Inc. - Mohammed Satiroglu - rejects charges in his address.

  13. Money Trade Coin — the Mumbai police arrested a fraudulent gang after they deceived people by promising super profits. "Flintstone Group" has been working under the cover of a real estate company from 2016 and has been offering investments in cryptocurrencies. However, investors reported violations to the police after the company failed to secure the promised profit. Subsequently, the police raided the office of the firm. Unfortunately, the main suspects by that time fled the country, as a result, investigations were suspended.

  14. Coinone — after a 10-month investigation conducted by the cybercrime unit, the South Korean police department confirmed that it would continue to pursue the Coinone cryptocurrency giant on charges of illegal gambling. The company has been providing services for margin trading without the appropriate permission of the authorities.

  15. Syscoin — the developers of Syscoin cryptocurrency reported that the account of one of the token creators was hacked. Hackers exploited the vulnerability and downloaded the virus to Github. The Syscoin team warned that users who downloaded the 3.0.4.1 client installer for Windows from June 9 to June 13 may be victims of the attack.



The audit of the investment attractiveness evaluation results

The experts of the agency for the evaluation of digital assets DigRate made the following changes as of 30.06.2018 as the results of revision of investment attractiveness evaluations and the quality of projects:


  1. Edenchain: the investment attractiveness score has been increased from 4.6 tо 4.9, the Quality Rate has been upgraded due to the launch of E-Edge web platform.

  2. JURY.ONLINE: the Quality Rate has been downgraded due to extension of ICO deadlines, the investment attractiveness score has been increased from 5.0 to 5.1 due to partnership with Indacoin.

  3. Scorum: the Quality Rate has been downgraded due to failure to meet deadlines of the road map (the listing of the token on exchanges was scheduled for March 2018, tokens are still not traded).

  4. DreamTeam: the Quality Rate has been downgraded due to failure to meet deadlines of the road map.

  5. MicroMoney: the Quality Rate has been downgraded due to lack of information from the project team on the implementation of road map; the last activity on GitHub was more than 6 months ago, links to the project's software products are not active.

  6. RoomDAO: the investment attractiveness score has been increased from 4.2 to 4.6, the Quality Rate has been upgraded due to MVP launch.

  7. DeHedge: the investment attractiveness score has been increased from 5.1 to 5.3 due to partnership with CoinSwipe.

  8. Hedera Hashgraph: the investment attractiveness score has been increased from 5.1 to 5.4 due to partnership with Yoti and Satori LIT Token.

  9. Atonomi: the investment attractiveness score has been increased from 4.9 to 5.1 due to beta version launch.

  10. Edenchain: the investment attractiveness score has been increased from 4.9 to 5.0  due to partnership with ROA Invention Lab.

  11. Taklimakan Network: the investment attractiveness score has been decreased from 5.0 to 4.9 due to DDoS-attacks on the company's servers.

  12. Morpheus Labs: the investment attractiveness score has been increased from 5.2 to 5.3 due to partnership with QuarkChain and NEM Foundation.

  13. Serenity: the investment attractiveness score has been increased from 5.0 to 5.1 due to partnership with ARUM Capital and DominionFX.

  14. Sparkster: the investment attractiveness score has been decreased from 5.6 to 5.4 due to the postponement of the ICO.

  15. Solve.Care: the investment attractiveness score has been increased from 5.3 to 5.4, the Quality Rate has been upgraded due to conducting safety audit of the smart contract.

  1. Koios AI: the project was canceled due to marketing problems. The evaluation of the project is not valid.



Top 5 projects for the second half of 2018

Analysts of the rating agency for the evaluation of digital assets DigRate selected  the 5 most promising ICOs of the second half of 2018.


  1. Iryo Network (Healthcare), ICO starts in July 2018. No DigRate score.

Iryo Network creates a decentralized network for storing and processing medical data. Data security will be ensured by the use of technology of zero-knowledge proof, which is resistant to hacker attacks.


  1. nOS (Blockchain Service), ICO starts in July - September 2018. No DigRate score.

nOS is a virtual operating system on NEO, which will include an application store and a web browser. nOS repeats Cardstack solutions developed on Ethereum in many ways, but for decentralized apps it repeats the NEO network.


  1. COTI (Cryptocurrency), ICO starts in August 2018. No DigRate score.

COTI is a payment system and cryptocurrency using the technology of a directed acyclic graph (DAG), which modestly contrasts itself with Visa and Mastercard. Instantly protected transfers and close to zero commissions - that's what awaits us witin this system.


  1. NuCypher (Blockchain Service), ICO — TBA. No DigRate score.

NuCypher will help developers of decentralized apps protect their data in the blockchain by re-encrypting it through a proxy server, which will add a new level of confidentiality to distributed systems and decentralized apps.


  1. Orchid Protocol (Blockchain Service), ICO — TBA. No DigRate score.

Orchid Protocol is a decentralized, open source platform that will not route traffic from Internet users through central authorities (Internet service provider or VPN), but through a network of participants randomly. This will promote anonymity and the absence of censorship in the Internet.



CONCLUSIONS


The first half of 2018 turned out to be disappointing for all cryptocurrency enthusiasts, and the bear trend reigned in the market all half of the year. The total capitalization of the cryptocurrency market declined steadily and, in the end, lost more than 70% compared to the beginning of the year. The price of the dominant currency Bitcoin decreased by 64.45%. The price of the second currency on capitalization - Ethereum - fell by 67.73%. It should be noted that Ethereum, like most altcoins from the top 20 in terms of capitalization, showed a higher rate of decline compared to Bitcoin. But do not panic, as correction within 60% for traditional markets is deemed deep, but still within the norm. Although the correction seems frightening, it is a sign of market recovery and contributes to a more equitable and efficient distribution of assets.

The increase in the popularity of Bitcoin and Ethereum compared to altcoins makes it clear that investors are more likely to trust already established currencies, that are less exposed to changes in market conditions. It can also be noted that the dominance of Bitcoin is associated with its price, and the indicators are inversely proportional - as the domination increases, the price falls, and vice versa. At the same time, increase and decline in dominance occur cyclically. Excessive increase in Bitcoin’s dominance cycles once again show that the market is in a compressed state without additional inflow of fresh capital.

Many analysts attribute the drop in market capitalization and, in particular, Bitcoin prices with the launch of Bitcoin futures on CBOE and CME at the end of last year. Markets of real financial instruments, for example, stock exchanges, were created for direct investors, and the futures market was created for risk insurance. Thus, earlier on the market, investors that could only profit from the rise in the price of Bitcoin prevailed. With the advent of futures, it became possible to profit from falling prices, that was used by "bears", and their actions reduced the price of Bitcoin.

An important negative trend for the first half of the year was the frequent occurrence of "51% attacks" successfully conducted in the Bitcoin Gold, Litecoin Cash, Verge and Monacoin networks. In the last week of the first half of 2018, The BTC.com and Antpool mining pools produced 25.5% and 16.5% of blocks in the Bitcoin network, respectively, according to CoinDance. Given that both of these mining pools are owned by Bitmain, the world's largest manufacturer of integrated circuits for mining, it can be stated that Bitmain took control of about 42 percent of the Bitcoin network’s hashrate. This level is dangerously close to controlling a 51% of hashrate, which theoretically will allow Bitmain to attack the Bitcoin network to its advantage.


Hacker attacks on crypto exchanges also began to be perceived as something quite ordinary - more than 10 exchanges were attacked for over half a year, including even the largest and authoritative ones: Binance, Bitfinex, Bithumb and YoBit. What can we say about relatively small exchanges with insufficient resources to confront hackers, like BitGrail, Coinchek or Coinrail? This situation forces investors to seriously approach the diversification of their funds through exchanges, and opening accounts in less than 5-10 different platforms is now considered poor etiquette.


Another trend was the move towards the emergence of exchange-traded funds focused on Bitcoin (ETFs). Recently, the SEC announced that it is considering changes to the rules previously prohibiting the listing of Bitcoin ETFs on exchanges. The founders of Gemini crypto exchange, the twins Tyler and Cameron Winklevoss, received a US patent for the concept of a cryptocurrency exchange investment fund on June 21. Many experts are sure that the main driver of the next medium-term rally in Bitcoin's price will be the inflow of institutional investors. Now the main barrier that prevents the entry of institutional investors into the industry is the lack of reliable solutions for storing digital assets and other products aimed at large market players.


The US Department of Justice, the Securities Commission and the North American Association of Securities Administrators increased their activity with respect to the cryptocurrency market and conducted a number of fraud investigations in the field of cryptocurrency and ICO. In addition, experts predict that the US Internal Revenue Service will soon close the loophole in revenue accounting, which is currently provided by crypto exchanges, and will force traders to verify bank accounts on stock exchanges, as it already happens in South Korea. All this indicates the expansion of market regulation in the US, which should positively affect the attitude towards the industry of other developed countries.


An important factor was the introduction of blockchain technology into traditional business. Many large companies from a wide range of industries are beginning to realize that the advantage of using distributed systems is obvious. There are banks, insurance, financial and investment companies, that are already reaping the benefits of the digital revolution. As one of the most significant examples we can mention the project of Pavel Durov Telegram, which, if successfully launched, can become more than infrastructure project for the existing blockchain communications, as Facebook was for the Internet in its time. This will be the first large-scale project, where the successful non-blockchain app (Telegram messenger) will go to the crypto side. We can only hope that Pavel and his team will not fail and fulfill all their promises, and there is no particular doubt with such level of funding and experience.


A lot of skepticism about cryptocurrencies came from influential financiers such as Gary Cohn, Warren Buffett and Nick Colas who have repeatedly made statements about the disappointing prospects of cryptocurrencies and Bitcoin in particular. But there were also oppositionists - for example, the general director of the Blackmore Group and the Wealth Chain Group, Phillip Nunn still believes that bitcoin will reach $ 60,000 this year. A well-known VC investor Tim Draper does believe that Bitcoin's capitalization will soon reach $ 10T.


Gainers of the first half of 2018 are Ontology, Zilliqa и Wanchain, the price of their tokens has grown several dozen times. Landcoin, Aurora и AB Chain are main losers.


The ICO market has been showing an increase in the amount of raised funds by 110.2% compared with the previous half-year, according to ICO GLOBAL MARKET STATS. Such an impressive gap was provided mainly by EOS and Telegram, that managed to attract more than $ 5.7bn. The total sum of all projects for the first half of 2018 was $ 17.4bn. The number of conducted ICOs also increased by more than 30% compared to the previous half-year. The greatest interest of the audience was traditionally caused by infrastructure projects, projects related to trading and investments, projects from the category of finance and communications. The general increase in the number of raised funds and number of ICOs says that many people continue to be optimistic about this industry despite the protracted decline in the market.


Investors have become much more cautious compared to last year, and this leads to a decrease in the number of successful ICOs. People are becoming more choosy and are looking for transparent projects that have ready-made products or prototypes, and one good idea is not enough to collect tens of millions of dollars, as it was in 2017. The good news is that the era of scams in the ICO market under such conditions will soon end. Social networks and Internet giants try to distance themselves from fraudulent activities in the cryptocurrency field in every possible way. Facebook, Instagram, Google, Twitter and LinkedIn now block any ads related to digital currencies. True, this decision is perceived in two ways: on the one hand, there will be less  scam, as unscrupulous projects simply cannot attract the attention of inexperienced investors. But on the other hand, the whole industry will suffer because of the declining popularity of cryptocurrencies due to the advertising ban. It became known recently that Facebook intends to update its policy, that prohibits any advertising of cryptocurrency. Now the company will allow advertisements aimed at promoting cryptocurrencies and related content to advertisers who have been checked. Therefore, there is a hope that in the near future other Internet giants will reconsider their attitude on this issue.


So far, cryptocurrencies attract people's attention mainly due to possible speculative yield. It takes some time for people to be completely imbued with the ideas, goals and prospects of crypto economics and stop chasing profit, starting to look at the ecosystem as a whole instead. This trend should become one of the key factors for further growth, along with the continuation of the development of legislative regulation and the emergence of reliable solutions for large institutional players.




Important news of the first half of 2018


Date

News

The actual situation on the market

Impact on the market

January

02.01.2018

New cryptocurrency rules just came into effect in South Korea

Growth

Negative

10.01.2018

Bitcoin ETF Applications Forced to Withdraw Under SEC Scrutiny

Fall

Negative

15.01.2018

China to Block Access to International Cryptocurrency Exchanges

Fall

Negative

15.01.2018

Cryptocurrency ban in Indonesia

Fall

Negative

15.01.2018

Chinese authorities plan to block all cryptocurrency platforms

Fall

Negative

18.01.2018

South Korea ‘Considering’ Shutting Cryptocurrency Exchanges

Fall

Negative

19.01.2018

India sends tax notices to cryptocurrency investors

Fall

Negative

23.01.2018

South Korea will ban anonymous crypto trading from January 30

Fall

Positive

24.01.2018

8 Major South Korean Cryptocurrency Exchanges Fined $130,000 For Poor Security Standards

Growth

Negative

25.01.2018

Federal Law “On Digital Financial Assets” Drafted by the Russian Ministry of Finance

Growth

Negative

29.01.2018

Indonesia’s central bank considering adopting blockchain technology to launch digital rupiah

Fall

Positive

31.01.2018

Facebook is banning cryptocurrency and ICO ads

Fall

Negative

February

02.02.2018

Japan’s regulator raids Coincheck exchange

Fall

Positive

02.02.2018

Supply of USDT Increases Significantly Following December 6th Subpoena

Fall

Negative

08.02.2018

The EU regulator called cryptocurrencies one of its priorities for this year

Growth

Positive

10.02.2018

Crypto Investors Face Tax of Up to 55% in Japan

Growth

Negative

12.02.2018

The Central Bank of Thailand banned operations related to crypto trading

Growth

Positive

13.02.2018

Coinbase, CryptoCompare, and BlockEx created the self-regulation body (CryptoUK)

Growth

Negative

16.02.2018

The Swiss regulator published guidelines for ICO

Growth

Positive

20.02.2018

Venezuela launches its own cryptocurrency

Growth

Negative

21.02.2018

The Snapchat messenger has joined the ban on ICO advertising

Growth

Negative

22.02.2018

France’s AMF says digital advertising of CFDs on cryptocurrencies is prohibited under Sapin 2 law

Fall

Negative

26.02.2018

Korea Informed FATF on Measures to combat money laundering through cryptocurrency

Fall

Negative

27.02.2018

Krungthai Bank (after Bangkok Bank) stopped operations with cryptocurrencies in Thailand

Fall

Positive

March

01.03.2018

The SEC began a large-scale inspection projects-the organizers of the ICO

Fall

Negative

02.03.2018

Bitcoin was recognized as legal tender in Germany

Fall

Negative

03.03.2018

The SEC sent out summons to at least 80 crypto companies

Fall

Positive

07.03.2018

US Marshals Service announced that it will sale 2170 BTC

Fall

Negative

08.03.2018

A number of Japanese crypto exchanges withdraw their applications for registration in FSA

Fall

Positive

08.03.2018

Binance hacking

Fall

Negative

14.03.2018

Authorities of Cambodia banned banks from participating in cryptocurrency transactions

Fall

Positive

14.03.2018

Google will ban all cryptocurrency-related advertising

Fall

Negative

16.03.2018

The financial regulator of France blacklisted 15 crypto investment companies

Fall

Negative

16.03.2018

Yandex banned cryptocurrency and ICO advertising

Fall

Negative

21.03.2018

Financial leaders of G20 postpone the problem of cryptocurrency regulation

Fall

Negative

27.03.2018

Israel Interim Report on Cryptocurrency: Not Considered to be Securities

Fall

Negative

27.03.2018

The EU regulator tightened its position regarding cryptocurrency derivatives

Fall

Negative

28.03.2018

Twitter banned cryptocurrency and ICO advertising

Fall

Negative

29.03.2018

China's Central Bank Eyes Crypto as Possible Yuan Risk

Fall

Negative

30.03.2018

Thailand Approves Draft Decree on Crypto

Fall

Negative

April

03.04.2018

Google Bans Cryptocurrency Mining Extensions From Chrome Web Store

Growth

Negative

04.04.2018

Liechtenstein to Avoid 'Excessive' Blockchain Regulation: Prime Minister

Growth

Positive

04.04.2018

Chinese Petro Giant Sinochem Exports Gasoline using Blockchain Technology

Growth

Positive

04.04.2018

It’s Important to Try Using Cryptocurrencies, Says Japan’s Central Bank

Growth

Positive

05.04.2018

India’s Central Bank To Stop Dealing With All Crypto-Related Accounts


Growth

Negative

06.04.2018

SEC Considers Rule Change to Allow Bitcoin ETFs

Growth

Positive

06.04.2018

Soros fund reportedly preparing to trade cryptocurrencies

Growth

Positive

07.04.2018

Rockefeller firm confirmed its intention to invest in crypto startups

Growth

Positive

08.04.2018

Pakistan’s Central Bank Prohibits Crypto Dealings with a Circular

Growth

Negative

11.04.2018

Appearance of a new cryptocurrency regulator in the UK - CryptoUK

Growth

Positive

17.04.2018

Barclays Launches Venture Capital Unit To Invest in Smart Contracts and Blockchain Tech

Growth

Positive

19.04.2018

Batavia, a blockchain-based trade finance platform founded by banking giant UBS in partnership with IBM, has conducted its first live cross-border transactions involving corporate clients

Growth

Positive

21.04.2018

JPMorgan, National Bank of Canada, others test debt issuance on blockchain

Growth

Positive

23.04.2018

Iran’s central bank prohibits banks from dealing with cryptocurrencies

Growth

Negative

23.04.2018

The Chinese authorities report the blockchain of ICO-platforms in the country

Growth

Negative

26.04.2018

More Than $140 Million in Bitcoin Moved from Mt Gox Wallets

Fall

Negative


May

01.05.2018

SBI Launches Japan's First Bank-Backed Crypto Exchange

Growth

Positive

03.05.2018

Goldman Sachs announced the launch of the Bitcoin futures trading service

Growth

Positive

03.05.2018

South Korea Bill Pushes Legalization of New ICOs after 2017 Ban

Growth

Positive

10.05.2018

$2.5 Billion Sent Out of Iran to Purchase Cryptocurrencies

Fall

Negative

11.05.2018

New Huawei and Honor phones will have a pre-installed Bitcoin wallet

Fall

Positive

14.05.2018

LG launches its own blockсhain service “Monachain” – media

Fall

Positive

14.05.2018

Thailand: Legal Framework For Cryptocurrencies Comes Into Force ы

Fall

Positive

15.05.2018

IBM to Issue Cryptocurrency Token on Public Stellar Blockchain

Fall

Positive

17.05.2018

Thailand Inches Closer to Cryptocurrency Taxation

Fall

Positive

18.05.2018

Switzerland Seeks a Study of Starting Its Own Cryptocurrency

Growth

Positive

20.05.2018

Tether Mints $250M of New USDT Tokens, Rekindles Controversy

Growth

Negative

21.05.2018

LMAX Exchange Group Launches Institutional Cryptocurrency Exchange

Growth

Positive

22.05.2018

World’s Fourth Largest Bank MUFG To Launch Own Cryptocurrency In 2018

Fall

Positive

23.05.2018

Russia’s Digital Economy Bill Supported by State Duma Committee in Move Towards Crypto Regulation

Fall

Positive

24.05.2018

Bitcoin Gold suffers losses of up to $ 18 M after attack of 51%

Fall

Negative

26.05.2018

Apple Just Added Ripple (XRP) to iOS Stocks Application, Propy to Accept XRP as well

Fall

Positive

27.05.2018

Norway plans to issue a CBDC token from the Central Bank of the country

Fall

Positive

28.05.2018

Online disputes about the Rothschilds involvement in the creation of their own cryptocurrency projects

Fall

Positive

June

01.06.2018

IOTA Partners With Norway’s Biggest Financial Group, Causing Price to Surge

Growth

Positive

04.06.2018

Microsoft to acquire GitHub for $7.5 billion

Fall

Negative

05.06.2018

Cryptocurrency Exchange Giant Coinbase is Officially Launching in Japan

Fall

Positive

07.06.2018

Japanese I.T. Giant Fujitsu Unveils Blockchain Platform for Retailers

Fall

Positive

10.06.2018

South Korean Exchange Coinrail Hacked

Fall

Negative

11.06.2018

Regulation of Cryptocurrency: Canada

Fall

Positive

12.06.2018

Wells Fargo Bans Cryptocurrency Purchases on Its Credit Cards

Fall

Negative

13.06.2018

No, India hasn’t banned cryptocurrencies

Fall

Positive

15.06.2018

President Trump’s former Chief Strategist to start new cryptocurrency

Fall

Positive

20.06.2018

Breaking: South Korean Crypto Exchange Bithumb Hacked, Thieves Steal $30 Million

Fall

Negative

25.06.2018

Tether Releases $250 Million of USDT Tokens, Investors Await Crypto Price Jump

Fall

Negative

28.06.2018

New cryptocurrency rules in South Korea

Fall

Positive

28.06.2018

Abu Dhabi Regulator Introduces Regulations for Its Financial Center and Free Zone

Fall

Positive

28.06.2018

Mastercard received patent for anonymous blockchain transactions

Fall

Positive

30.06.2018

Payments Giant Qiwi’s Execs to Launch Russia’s First Crypto Investment Bank

Growth

Positive