TokenInsight —Weekly Report 7/28-8/3

Trend Review

During the period from July 28thto August3rd, the average TI index reflecting the overall performance of the blockchain industry was 815.56 points and decreased by13.32 points(-1.61%), with a maximum of 862.65 points( at July 28th 5am) and a minimum of 746.29 points( at August3rd12pm). Compared to last week, the TI index declinedby 9.76%.

During the period from July28thto August 3rd, the average TIG index reflecting the overall performance of the blockchainindustry was 740.11 points and decreased by 41.42 points(-5.30%), with a maximum of 798.17 points and a minimum of 666.61 points. Compared to last week, the TIG index declinedby 13.02%.

On August 3, the daily continuously compounded rate of return of TI Index was higher than that of BTC but lower thanETH index. On July 29th to July 31st and August 2nd, the daily continuously compounded rate of return of TI index was higher than that of ETH and lower than BTC, but it was higherthan BTC and ETH on August 1. On July 28, the daily continuously compounded rate of return of TI Index was lower than ETH and BTC at the same time.

This week the market has remained sluggish withnearly 90%of the 1351tokens on listing decreasing in price. The average weekly yield is -14.96%(excluding TEAM outliers),the median is -16.75%. The top three gainers areSUP(+236.98%)、SMS(+165.47%)、NSR(+140.23%),while the top three losers are IFLT(-85.04%)、AHT(-80.33%)、DGPT(-80.13%).

This week, BTC showed a downward trend. The average price of BTC was $7,896.91,up $77.50 (+0.99%) from last week. BTC peaked at $8,280.94 on July 29th around 10:00am and fell to its lowest point to $7,297.38 on August 3th at 12:00pm. In total, the price of BTC decreased this week by 8.23%, compared to this same period last week.

From July 28th to August3rd, the average price of ETH was $442.34. This week, ETHpeaked at $473.58 on July 28th at 5:00pm, and fell to its lowest point to $397.78 on August 3rd around 12:00pm. In total, the price of ETH decreased this week by 11.15% compared to this same period last week.

From July 28th to August 3rd, the average price of EOS was $7.69. This week, EOS peaked at $8.52 on July 28th at 7:00am and fell to its lowest point to $6.86 on August 3rd around 8:00am. In total, the price of EOS increased this week by 14.35% compared to this same period last week.

From July 28thto August 3rd, the average price of ETC was $16.28. This week, ETCpeaked at $17.39 on July 30th at 3:00pmandfell to its lowest point to $14.13 on August 3rd around 9:00am. In total, the price of ETC wasdecreased this week by 12.66% compared to this same period last week.

From July 28th to August 3rd, the average price of ETC was $0.96. This week, ETC peaked at $1.04 on July 29th at 8:00am and fell to its lowest point to $0.77 on August 3rd around 12:00am. In total, the price of ETC decreased this week by 8.88% compared to this same period last week.

From July 28th to August 3rd, the average price of ETC was $785.90. This week, ETC peaked at $839.30 on July 29th at 8:00amandfell to its lowest point to$700.81 on August 3rd around 12:00am. In total, the price of ETC decreased this week by 11.09% compared to this same period last week.

IndustrySectors

According to TokenInsight’s industry classification for tokens, currently 4token industry sectors have enjoyed positive returns this week, accounting for less than 20% of the overall 21 token industry sectors. The top 3 gainers this week were data storage(+119.00%), E-commerce (+12.27%), and General Exchange (+10.17%), while the top 3 losers were Communication (-31.83%), supply chain (-30.70%), medical health (-28.77%).During the week, the industry rankings changed a lot. The sharp rise of ZClassic pulled up the data storage industry. The amount of its growth increased from the third place last week to the first place this week. The communications industry, which topped the list last week, fell to the bottom of the list this week.

Among majorcryptocurrencyindustries,themarket performance of BTC and BCH in the payment currency and the common platform in which ETH and EOS are located enjoyed an above-average performance (-6.77%, -9.41%, the seventh and eighthgainer); MIOTA, ETS’s Internet of Things industry’s gains this week were unchanged from last week (-13.14%, the 11th gainer)

Week Indicators

Turnover Ratio

The turnover ratio is a measurement of token liquidity calculated by dividing total trading volume over a period by the total market value for that same period. The higher the turnover ratio, the more frequently traded a token is. This points to a clear indication of higher trading activity.

FromJuly 28th to August3rd, the market turnover ratio decreased by 11.74%. By August 3rd, it was approximately 4.93%. EOS and ETC enjoyed a higher turnover ratio than that of the market, being respectively1.83 and 2.23times of the latter, the latter’s activity increased significantly on August 2nd . The turnover ratio of BTC, ETH, and MIOTA were lower than the market, indicating a relatively low level of activity. Among them, MIOTA had the lowest turnover rate, and the average weekly turnover rate was only one-third of the market.

TIPV Ratio

Asignificant negative correlation can be seen between the TIPV ratio and the closing price of cryptocurrencies throughout different industries. This follows a similar association to the traditional P/E ratio seen in finance. Being, the lower the TIPV ratio, the higher the potential profitability of a cryptocurrency.

From July 28th to August 3rd, the market TIPV ratio increased by 13.31% to 20.27by August 3rd. The average weeklyTIPV ratio of EOS and ETCare only half of themarket. The average weekly TIPV ratio of BTC, ETH and MIOTA are higher than the market, among which the TIPV ratio of MIOTA was quickly fell below the market level on August 3, only 20.12.

Sharpe Ratio

Wherer is the asset return, rf is the risk free rate, σis the standard deviation of the asset excess return.

The Sharpe ratio is a measure of an investment’s excess return, above the risk-free rate, per unit of standard deviation. It is calculated by taking the return of the investment, subtracting the risk-free rate, and dividing this result by the investment’s standard deviation. The higher a Sharpe ratio is, the higher potential for returns.

From July 28th to August 3rd,the Sharpe Ratio of all 5 tokens declinefrompositiveto negative, there was a different degree of recovery on August 3rd.ETH experienced the largest changeto -7% from last week’s figure of -81%,up to 10.89 times.While the Sharpe ratio of BTC decrease from 61% to -73%, the final period is reduced by 2.2 times compared with the beginning of the period.

The Number of Github Commits

Compared to last week, the ranking of ZSC this week jumped from the tenth place last week to the first place and its Github commits are 143 times. TRUE rose from the fifth to the second overall on Github Commits by 71.08%.Both GXS and ZIL rise by twoplaces whose the number of Github Commitsrespectivelyincreased by 43.90%and 25.00%. SHOW dropped from the second last week to the fourth, but the number of Github commits increased by 13.83% to 107 times; ZSC dropped by two places to the fifth compared with last week, and the number of Github commits decreased by 1.12%.

Current Events

Emergencies

OKEx Announced to Delist GTC due to Existing Problems of the Project

OKEx announced that they will be delisting the trading of GTC token at 12:00 Aug 6, 2018 (HKT) and that in the future they will no longer support GTC trading, withdraws, and other exchange services. SNC’s investment risk report published on August 3rd believes that Game.com (GTC) has risks regarding its “very limited transparency”, “doubtful trading transactions”, and more. OKEx has investigated the project manager of GTC regarding much of the existing problems and has remided them to fix the issues as soon as possible in order to notify users about the project’s development and how to be more responsible to its users. Le Xu, in response, stated that SNC’s rating was not fair and expressed his disappointment as OKEx easily believed SNC’s words. Le Xu demanded to exit the market and remove his “professional investor” identity. The delisting application was sent by Xu on August 3rd and approved by OKEx shortly after. The delisting announcement was made on the night of the same day.

Nowadays, all kinds of blockchain projects are appearing. Even though GTC’s manger continues to state that the problem remains in the unfairness of what ocured, its decision of not publicizing its project progress and team information is ultimately what caused tensions between the two. In order to protect investors’ benefits, it is important for exchanges to follow up and check projects’ operating status regularly.

Bithumb Exchange in South Korea Broke Its Cooperation with NongHyup Bank and Stopped Opening New Cryptocurrency Accounts

During an earlier report, one of the largest cryptocurrency exchange known as Bithumb’s contract with Shinhan Bank has expired and ended. When trying to reach an agreement with NongHyup Bank, another member of “the fourth biggest banks” in Korea, Bitthumb was rejected. An official from NongHyup Bank stated that the reason of the rejection remained in the problem of protecting customer information which led to issues in dealing with money laundering. Due to missing bank partners, Bitthumb has decided to stop opening new cryptocurrency accounts starting from August 1st. Customers with existing accounts will not be affected and can still deposit or withdraw money by linking their bank account.

Bad news from Bitthumb has kept coming up during the past three months. From being attacked by hackers, causing multiple cryptocurrencies to rise, pausing back its deposits, and withdrawing actions pausing new registrations. Even if it resumes its teller services on August 3rd, the renewal of Coinone and Korbit with NongHyup Bank hit Bitthumb’s trading volume with a 40% decrease after it stoped registering new users’.

Hiwifi’s Corporation with iWealth Ended and the Company Facing Difficulties to Continue.

Hiwifi’s founder Chuyun Wang has addressed a letter to the company, stating that due to the after effect of iWealth’s “illegal absorbtion of public deposits” case, the company is facing a situation which has a blocked sales channel, provider demanding money, overdue bank loans, ended blockchain cooperation, and that normal business can no longer continue. Last year, Hiwifi launched its blockchain wifi router and upgraded the rest of its two million online routers to blockchain routers. In March, Hiwifi chain officially enabled mining functions (closed now) and included ACT, GCT, and ETH token.

Hiwifi is the second company after PHICOMM that has been affected by cooperating with finical platforms. Because of the traceability of blockchain, finance is regarded as the best industry to adapy the implementation of blockchain. iWealth has stated that it “relies on technologies such as blockchain to enhance user experience, secure assets safety, and progresses have been achieved.” But in less than a month, it has suffered greatly as exchange assets. We can conclude throught this that blockchain financial projects still have a long way to go.

Bitcoin ETF Proposal by Crypto Exchange Gemini Rejected due to violations in Exchange Laws

According to ETH News, The SEC indicated that the veto was not based on a decision to assess whether Bitcoin or blockchain technology was more prevalent, but rather whether it is useful or valuable as an innovation or investment.VanEck SolidX Bitcoin Trust, which has previously had two applications to have its Bitcoin shares listed as ETFs rejected, has another Bitcoin ETF proposal with the SEC. This is another product Cboe would intend to list and the decision deadline is March 4th in 2019.

The SEC believes that BZX has failed to prove its proposal meets the requirements of the Exchange Law. Its views can be summarized as follows:

1. It cannot prove that Bitcoin can be protected from manipulation;

2. It is difficult to identify and stop frauds and behaviors of manipulating market;

3. There is no supervision agreement sharing;

It is difficult to protect investors and public interests. If the Bitcoin ETF is approved, it will bring large amounts of capital to the market, accelerate the development of the digital industry, and strengthen the public’s acceptance of cryptocurrency.

International Policies

Iran’s attitude changes and plans to legalize cryptocurrency

According to Trust Nodes, Iranian President Hassan Rouhani chaired a meeting to discuss cryptocurrencies in the national economy, and has began working with a group related to the industry. Abolhassan Firouzabadi,head of the High Council of Cyberspace, said that the relevant final decision had not yet been made, but a working group of the parliament was already studying the establishment of cryptocurrency online exchanges, as well as mining, and which cryptocurrencies will be announced legal.

Earlier this year, the Iranian central bank announced the ban on cryptocurrency services and initiated the review of cryptocurrency exchanges, which appears to have begun to “suppress” the cryptocurrency industry. But US sanctions against Iran, which will be implemented in August this year, may change their attitudes because sanctions mean that Iran will not be able to trade overseas with many countries and cannot make international payments, all which cryptocurrencies may provide them with a solution.

The Philippine ICO draft was approved, and the SEC wants to define tokens as securities by default

The Philippines Securities and Exchange Commission (SEC) has approved a set of draft rules for regulating ICOs,which requires any company in the country wishing to issue an ICO to submit an initial assessment request to the SEC 45 days before it starts financing. In this assessment request, the issuer must explain its project in detail and provide evidence that the company is in compliance with the provisions of the draft. This will advance the legal sale of cryptocurrencies in the Philippines.

The Philippine SEC wants to define all tokens as securities by default to avoid ICO projects that are proven to be scams afterwards. If they are not identified as securities, public investors will not have clear recourse. The draft also stipulates that in certain circumstances the token has an exemptionfrom being registered in theSEC.

The Bank of Thailand allows local banks to operate cryptocurrency business while personal business is still prohibited

According to Cointelegraph, the Bank of Thailand(BoT) recently announced that it will allow local banks to set up a branch of cryptocurrency businesses. From an eariler statement issued by the BoT, Thai banks can now issue digital tokens, provide crypto brokerage services, run crypto-related businesses, and invest in cryptocurrencies through subsidiaries. However, these subsidiaris are still not allowed to provide cryptocurrency-related businesses to customers and the public, and can only do business with companies approved by Thailand’sSecurities and Exchange Commission and the Office of Insurance Commission(OIC).

In June, the BoT revealed that it was considering providing a “new way of conducting interbank settlement” by using a central bank-issued digital currency (CBDC)to provide a new solution for inter-bank liquidation. In July, the Thai government issued regulations on ICOs, making it one of the first countries in the world to allow ICO in a regulatory environment.

Korean government proposing to take away tax benefits for crypto exchanges, indicating strengthening regulations

According to the Yonhap News Agency, South Korea announced on the 20th that it would amend its 2018 tax law to reduce the withholding tax rate from 25% to 14%. However, cryptocurrency exchanges that have gained huge profits because of the speculative boom are regarded as “unclear industry classifications”, and are given a maximum of 50% tax reduction. The South Korean government believes that cryptocurrency exchanges are not qualified to benefit from tax exemptions due to insufficient value creation.

Some analysts believe that it can be seen that the Korean government’s regulations on the cryptocurrency and blockchain industries are gradually strengthening. The South Korean government is accelerating the completion of the country’s first cryptocurrency and blockchain legislation to legitimize this emerging industry; the Financial Supervisory Service(FSS) is launching a blockchain industry study that includes development of stock trading system based on blockchain technology, encouraging Korean securities regulators and companies to participate in the cooperation, while investigating the use of blockchain technology by global stock operators.

Giant Layout

Google is about to Enter the “Blockchain as a Service (BaaS)” Field

According to BTCwire news. Google is partnering with BlockApp, which owns Blockchain-as-a-Service (BaaS) platform. With this partnership, Google is dipping its toes in waters it hasn’t swam in before, deploying blockchain technology that could soon be working on developing a BaaS platform of its own. It also provides customers with financial technology and cloud service solutions.

BaaS is a space in which enterprises open up their own cloud service networks to run a blockchain node. Compared with common nodes and exchange nodes, the usage is as follows: quickly establishing the development environment required by itself, providing a series of operation services based onblockchain search, transaction submission, data analysis, etc.It is more instrumental and also easy to create, deploy, and run to monitor blockchains. Giants such as IBM, Amazon, and Baidu already have a presence in the sector with their own BaaS solution systems.

Tencent Blockchain Does not Issue Digital Currency

According to the Trademark Office of the State Administration For Industry and Commerce of the People’s Republic of China, Tencent Technology (Shenzhen) Co., Ltd. has applied for trademarks such as infcoin, Qbanking, LinkBanking, etc. Some media agencies speculate that Tencent may follow Netease Planet, Baidu Duyuzhou, and others launching a similar blockchain gaming platforms and issuing cryptocurrencies.

Tencent responded that the trademarks have nothing to do with the currency, and the Tencent blockchain will not issue cryptocurrency.

ICE is Working with Microsoft and Starbucks

According to Business Insider, the New York Stock Exchange parent company (ICE) is working with Microsoft and Starbucks to establish a new company, Bakkt, which will build a “digital asset ecosystem” including Bitcoin. The platform will allow companies to buy and sell digital assets. ICE previously entered the digital asset market through data source products earlier this year, and Bakkt will serve as a digital currency exchange platform for ICED. ICE also plans to launch a regulated bitcoin futures contract in November.

IBM and CLS Cooperate to Create a Blockchain Application Platform

According to ETH news, IBM announced a partnership with CLS to develop a project called LedgerConnect that allows financial and software development companies to share blockchain apps. Based on the announcement, nine financial institutions agreed to participate, but only Barclays and Citigroup were mentioned in it. According to Ram Komarraju, CLS Innovation Director, “IBM and CLS hope to create a web ecosystem that allows interested parties to offer their apps so that some of the largest banks and buyer companies can access to and use them.” The system will be integrated into the bank’s IT system to upgrade/improve thestandardization of the global foreign exchange market and reduce process costs.

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