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Section 1: Global market update


In January, February and March, we witnessed a typical financial market battle of opposing bulls and bears, especially in Bitcoin. Investors convinced that Bitcoin was bottoming and would go up in short to medium term, acted on their predictions that the next cycle was about to begin. On the opposing side, critics responded by saying that DLTs had failed miserably, and were yet to produce a single viable application.

Soon enough, we started hearing about the crypto-spring that was coming, and that it would put an end to the crypto-winter. However, many remarked, with reason, that the feeling of total despair, which usually is associated with a significant bottom, had not been experienced. So, with markets in a constant battle between the positive and the negative views, this equilibrium was interesting to observe. Technical analysts were excited and, depending on their conviction, could see technical reasons to support their point of view.

Then, on April 2nd, that was it, a breakthrough occurred. Not only Bitcoin, but also many altcoins, surged by 25-30%+, but this happened on huge exchange volumes. On the charts, this looked very much like the end of the downtrend; and with no surprise; as of end April 2019, the longs have it. The reversal of the 2018 short seller’s market can be considered to be over.

However this appears to be a little too easy, and it happened a bit too fast. So, it is worth trying to understand, in detail, why cryptos jumped that way, and at that moment in time.

First, contextually, as we made clear in the last review of this Quarterly, selling pressure was low. After such a catastrophic year in 2018, the value of crypto-assets was so depreciated that exiting from positions had become almost pointless. Then, a series of new reports about technical developments, as well as the continuous development of business applications, even though timid, began to support the notion that the future was brighter than the markets were reflecting.

Low volatility and relatively small volumes on exchanges made it possible for some actors to influence the market quickly. Moreover, indeed, it was observed that a few coordinated over-the-counter orders (worth several hundred million euros) were placed on the leading exchanges on April 2nd. When executed, these orders provided a sudden upward surge in the markets. As they watched technical resistance levels break, traders naturally acknowledged the fact that the upward trend was reasserting itself, and they piled in on the movement.

Whether you regard this initial surge as artificial, an indication of market manipulation, or whether you think this is reasonable market 
price action, the fact is that, after prices went up, they were able to maintain the higher levels. So, you can look at it as something that was meant to happen, with some actors taking the opportunity to trigger it spectacularly. The question remains whether this has been a big move that will hold and will be followed by further rises, or whether the step will soon be extinguished, at least partially, and drift back to normal behavior. However, of course, cryptos are hardly “normal”!


Also, the parallel of the years 2018-2019 and the years 2014-2015 cannot be overlooked. Our feeling matches that of many observers who have lived with awareness through both periods: in 2015, it felt like cryptos were dead, it was difficult to find reason to hope that markets would ever pick-up again; in 2019, so much is going on that it might not be actually possible to compare both situations… A pity, as it is easy to draw parallels, but that’s how it is.

So, let’s study where we all could be going from here.



Volumes of traded cryptocurrencies have risen big-time, mainly when expressed in cryptocurrencies.

A significant feature that was observed in the weeks immediately preceding April 2nd was the sharp increase in volumes traded on the exchanges. Something was happening, and today it can be said the bulls have had their hopes confirmed.


Some caution must be shown, though. It has been revealed that unscrupulous exchanges have been reporting fake volumes. From an exchange point of view, one of the most critical statistics traders/ investors look at is liquidity. So, when you look at and identify a crypto-asset you like, your next step is to check the exchanges on which it trades; you will tend to pick an exchange that trades the highest volume in the pair that interests you. This is why some exchanges are tempted to cheat when reporting volumes, to improve their rank and attract customers.


Some observers estimate that up to 95% of reported volumes are fake, mostly due to exchanges matching their own buy and sell orders, which are created simultaneously when the spreads are wide enough. Notably, BitWise issued a report for the attention of the US SEC in which they analyzed raw data reported by exchanges, from several angles, and plotted the volumes per size of the deal by exchange, and other metrics. Very convincingly, they demonstrated, with a few exceptions, that exchanges process systematically created fake orders to inflate volumes. It is worth mentioning that BitWise also identified several reliable exchanges, by volume: Binance, Bitfinex, Kraken, Bitstamp, Coinbase, Bitflyer, Gemini, itBit, Bittrex, and Poloniex.

So, the method may be irrelevant, but what matters is the fact that fake exchange volumes are reported – a lot. The crypto world is still a wild west! The positive consequence is that volume variations in the short-term might be useful data, but analyses of volumes over several months or years may not be as helpful for drawing long-term conclusions.




The Nasdaq index and the stock prices of the large tech companies within it are back to their highest levels, without having purged anything from this considerable bubble that has accumulated. All this, despite a movement in October last year that could have easily been interpreted as the end of the cycle. In our view, this is more insane than anything else.

So, stock exchanges can exhibit strainge behaviour. Although, not as much as crypto-assets. However,  we will not draw any conclusions here, and we won’t bring any inference from stocks; instead, we will focus on what crypto-assets are worth in any given situation.




The point we would like to emphasize here is how important we should expect the impact of DLT implementation to be in making markets more efficient.


Take the transportation sector for example. By defining a business protocol based on DLT, that would rely on non-fungible tokens to manage elementary movements of standardized objects (a container, a person, a parcel of this or that dimension), in a way that the barrier to entry to provide a service in the ecosystem becomes very low, you enable a bunch of new and small actors to enter the transport sector, and compete with one another to provide transportation solutions more effectively, and at more competitive rates. Thanks to a whole range of functionality and services that can be plugged into the ecosystem, customers can have confidence in people they do not know and have faith that settlement is going to be enforced, on standard terms; while also enabling resources can be allocated by financial actors more efficiently.


This vision of a future applies to the telecommunications sector, the energy sector, the banking sector, and others. Quite an exciting future insight isn’t it. And of course, there will be many exciting projects that will transform every industry.