Market Overview - April 2020

Relative Returns

The month of anticipation leading up to the third “halving” of Bitcoin looked much brighter than the previous month where all digital asset prices dropped sharply around March 12th and none were able to recover into the positive zone by the end of month. April has proven to be quite the opposite. Beside the small drop on April 2nd, none of the assets covered in this report ever went into a net-negative position for the month of April, and volatilities moved back from the extreme levels to a more normal zone.

As per the Bitcoin protocol, every roughly four years the system will undergo a ”Block Reward Reduction”, which is most commonly called the “halving”; It will reduce the reward paid to the miners by half, making it more expensive for them to create more supply in the market. Bitcoin will undergo its third “halving” on May 12th, and it is not clear if the historic price patterns will repeat when looking at the price movements around the prior two “halvings”. In 2012 we had a down month that led up to the halving, whereas in 2016 it was more of an upward spike followed by a pullback or correction. The month of April 2020 was definitely not a down month. However, towards the end of the month most assets experienced a slight correction. With that it becomes more likely, that if the historic pattern repeats, that we will be in for a stronger correction before the actual “halving” occurs on May 12th 2020.

Ripple had an exceptional month, towering more than 10% above Ethereum's monthly returns and doubling some of the other assets’ returns all together. This may come as a bit of a surprise since it was reported by Cointelegraph that Jed McCaleb, Ripple’s Co-Founder, has been selling XRP tokens throughout the month of April due to an alleged agreement previously made with Ripple. In total it is estimated that he liquidated roughly 54 million XRP tokens, at a rate of about 1.8 million XRP a day. The price however did not reflect heavy selling pressure at all. In actuality, XRP finished the month with a ~70% price gain. Throughout the month Ripple announced a relationship with Japan's Sumitomo Mitsui Financial Group (SMFG), which could explain some of the euphoria for the asset which finished as a top price gainer for the month.

The month ends with XLM being the biggest winner with 71.23% gain, followed by ETH with 57.21% gain. The other projects still did well, with EOS being the smallest gainer, but still appreciating by 28.40% throughout the month of April 2020.

April 2020, Biggest Changes

10-Hour Rolling Volatility