Markets Weekly is a weekly column analyzing price movements in the digital currency markets, and the technology’s use as an asset class.
This articles covers 4th November to 11th November, 2016.
The surprise US Presidential Election results pushed bitcoin 4% higher this week amid a choppy period for the digital currency markets.
After opening at roughly $709 on 4th November, bitcoin neared $740, placing it within reach of its June annual high of more than $780. But while this increase was notable, it fell short of some forecasts.
Cryptocurrency fund manager Jacob Eliosoff, for example, noted that he expected bitcoin prices to benefit more starkly from the uncertainty created by the election.
As previously profiled on CoinDesk, many analysts had expected a ‘Brexit-like’ impact, one in which the digital currency might have risen by $100 as it did this summer. When it became clear that the Brexit referendum would succeed, bitcoin prices surged, rising above $650 on 24th June after falling to $550 the day before.
Eliosoff told CoinDesk.
“The election reaction has been more nuanced than some of us foresaw – on a Trump win, I expected BTC to shoot up and stay there.”
Overall, bitcoin finished the week at $713.67, 3.8% higher than its opening price, but if the markets are any indication investors may have used the proceeds to seek profit elsewhere.
The privacy-oriented digital currency Monero, for example, surged more than 20% from $4.99 to $6.13 over the course of the week.
Monero enjoyed these sharp gains as Zcash, another digital currency that has focused on offering improved privacy features, plunged close to 75% during the period.
While Zcash enjoyed a huge spike in prices, rising to roughly 3,300 BTC (more than $2m) its first day of trading, the currency has fallen sharply since then, finishing the week at $225.74 after starting out the period at $900.
Petar Zivkovski, director of operations for leveraged bitcoin trading platform Whaleclub, believes that the results are evidence that Monero is becoming an interesting asset for traders.
“As other cryptos lost ground, more money went into XMR, especially after its decline last week. XMR price has recovered and still seems to appeal to a large market on the dark web,” he said.
Eliosoff also weighed in on the situation, telling CoinDesk that that ZEC’s steadily growing supply may be related to Monero’s rally.
“The total ZEC supply is still increasing very quickly every week, which means more sellers and a dropping price,” he added, noting that these sellers may be putting their money into Monero.
It is worth noting that while Zcash harnesses bleeding-edge cryptography in an effort to ensure privacy, Monero has thus far achieved far greater adoption on the dark web, a network of websites where buyers could benefit greatly from anonymous transactions.
In contrast, Monero has been around since 2014, so it has had more time to undergo testing.
Ethereums see volatility
Ether and Ether Classic experienced some mild volatility, during a week where the two digital currencies plodded on after their respective blockchains both underwent sudden hard forks.
Ether fell slightly during the week, dropping from $10.83 to $10.52 to finish the period with a loss of less than 3%, according to Poloniex. Ether classic went in the other direction, rising roughly 6% from 0.082 BTC to 0.087 BTC.
Analysts seemd uncertain as to the reason for ether classic’s boost, though at least one major exchange (China-based BTCC) did express interest in listing the digital currency.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Zcash and BTCC.
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