CRYPTO MOVERS AND PRICES
Crypto is quiet and unchanged this morning. Short-term volatility metrics continue to threaten new lows.
CRYPTO STORY OF THE DAY
Over the last few days, bitcoin gold (BTG), saw an aggressive rally. We wanted to use it as an example to highlight some of the volume and trading dynamics that make such moves possible.
This week, BTG an all but forgotten bitcoin fork, suddenly rallied over 50%. The token hard forked from bitcoin in October 2017 and immediately came under criticism for being opportunist and hastily put together. The Bitcoin Gold website suffered a DDoS attack almost immediately and has seen little developer support since. The token miraculously once held a market cap over USD 6 billion equivalent and today is closer to 150 million.
Spikes, such as the one seen in BTG tend to draw, attention. Furthermore, they can distort the little ancillary markets associated with the ecosystem, such as lending rates which spiked to over 3.4%/day in BTG this week. That said, it doesn’t take much to make such a move happen. BTG daily volume, even reported by the heavily exaggerated Coinmarketcap, is only a couple of million USD equivalent per day. Furthermore, fiat on-ramps, such as Bitfinex report less than USD 500,000 equivalent in volume per day. There are additionally, no derivatives markets either that can help police such moves and stabilize markets. Ultimately, it doesn’t take very much to create the outsized daily moves in such tokens while they nonetheless look impressive at the time.