CryptoQuant Weekly Round-Up [07-25-23 -- 08-01-23]
Welcome to our CryptoQuant weekly round-up, where we explore the performance of the digital assets world and share insights about the trends in the cryptocurrency market.
Weekly Performance Summary
The past week's performance of cryptocurrencies exhibited a somewhat stable trend. Among the top gainers, Bitcoin Cash (BCH-USD) led the pack with a gain of 3.83%, followed closely by Stellar Lumens (XLM-USD) and 0x (ZRX-USD) which registered gains of 2.88% and 3.51% respectively. In contrast, Bitcoin (BTC-USD) and Ethereum (ETH-USD) experienced minor losses of -0.81% and -1.06% respectively. Meanwhile, TRON (TRX-USD) experienced the highest decline of -3.74% among the cryptocurrencies.
Cryptocurrency Risk Analysis
Relative to the S&P 500 index, XLM-USD exhibited a higher risk with a standard deviation of 0.122137, which is significantly higher than the S&P 500 risk benchmark of 0.01428. On the contrary, BTC-USD and ETH-USD showed less volatility compared to the wider market with a standard deviation of 0.026089 and 0.029246 respectively, hinting at a comparatively lower risk profile in the crypto sphere.
Year-to-Date (YTD) Performance
From a YTD perspective, Bitcoin Cash (BCH-USD) retained its position as the best performer with an impressive 155.98% gain. Ripple (XRP-USD) and Stellar Lumens (XLM-USD) also exhibited solid performance with 106.20% and 107.33% gains respectively. Bitcoin (BTC-USD) and Ethereum (ETH-USD) logged respectable YTD gains of 75.82% and 54.56% respectively. Some cryptocurrencies have however struggled, with Algorand (ALGO-USD) recording a YTD return of -38.15%.
Diversification and Correlation
The week-to-date correlations revealed intriguing patterns. As seen previously, ETH-USD and BTC-USD continue to exhibit a high correlation (0.87), reflecting their market dominance and similar responses to market movements. The correlations among other pairs of cryptocurrencies varied, providing ample opportunities for diversification for savvy investors. For instance, DOGE-USD and XLM-USD had a correlation of 0.19, and XLM-USD and XRM-USD had a lower correlation of 0.23.
In summary, this week saw a relatively stable performance from the cryptocurrency market. While some cryptocurrencies registered modest gains, others recorded minor losses. With the varying correlations between different cryptocurrencies, investors have the opportunity to effectively diversify their portfolios and manage risk.
Please note, this analysis is meant to provide an overview of the market conditions and is not investment advice. Always do your own research and consider your financial position before investing in cryptocurrencies.
<YBC Quant Team>