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Digital Derivatives WeeklyMay 11, 2020

Digital Derivatives - Comparative Analysis of Crypto Sectors

Jitender Tokas
Chief Business Officer
May 11, 2020
What's in this post?

    Digital derivatives is a weekly newsletter bringing you the latest research, information and analytics from the cryptocurrency derivatives space brought to you by Delta Exchange.

    For last week’s edition, click here.

    Market Moves

    • Bitcoin (BTC) – $9,300.90 (+2.63%)
    • Ethereum (ETH) – $206.47 (-1.32%)
    • Ripple (XRP) – $0.216 (-1.65%)
    • Bitcoin Cash (BCH) – $245.70 (-1.36%)
    • Litecoin (LTC) – $46.22 (2.14%)

    Derivatives Insights

    Comparative Analysis of Cryptocurrency Sectors

    In this week’s newsletter we conduct a comparative analysis of the returns of various sectors in the cryptocurrency space looking at three horizons: 12 mths, YTD and post March 12th sell-off. The sectors we look at are as follows:

    • Privacy tokens
    • Exchange tokens
    • DeFI tokens
    • ETH killers
    • POS coins
    • POW coins

    The highest returns on a 12 months basis are for exchange tokens, up 77.90% for the year. The worst performing sector over 12 months are privacy tokens, down -43.53% over the previous 12 months. Exchange tokens have proven to be the most secure store of value across all sectors, with all exchange tokens up over 12 months except for BNB (-19.88%). Privacy tokens have taken a hit over the recent year due to increased exchange scrutiny and subsequently exchange delistings.

    The highest returns on a YTD basis are for DeFI tokens, up 53.16% for the year. The worst performing sector in this year are privacy tokens again, up 9.65% in 2020. DeFI tokens have had a strong year with an increase in mainstream exposure in the run up to Ethereum 2.0 and are looking on track to grow further as we progress through 2020.

    The highest returns since the March 12th sell-off are exchange tokens, up 89.49% for the year. The worst performing sector since the March 12th sell-off are DeFi tokens, up 76.6% since March 12th. This is likely driven by the increase in trading volumes and media interest as of late. Here it is interesting to note LEO remaining relatively stable since March 12th, up 12.63% – the worst performing token since March 12th.

    Privacy Tokens

    Privacy tokens are cryptographic tokens built around extensive privacy features including e.g. anonymised transactions. Analysed tokens include Monero, Zcash, Komono, Verge and GRIN.

    12 months YTD Post March 12th
    Monero – XMR -10.57% 31.90% 102.95%
    Zcash – ZEC -24.80% 56.80% 88.22%
    Komodo – KMO -54.46% 4.08% 59.37
    Verge – XVG -43.53% 9.65% 118.16%
    GRIN – GRN -73.50% -44.21% 43.24%
    AVERAGE -43.53% 9.65% 88.22

    Of Privacy tokens, Monero has been the best-performing asset over the last 12 months, with strong performances on a YTD and 2 month basis to complement this. GRIN – the smallest and newest privacy coin of those analysed – is the worst-performing privacy token analysed, down -44.21% year to date.

    Privacy Coins
    The Privacy token sector has been the worst-performing sector on a 12 month and YTD basis.

    Exchange Tokens

    Exchange tokens are digital assets issued by exchanges or trading platforms in the cryptocurrency space. Analysed exchange tokens include those issued by Binance, Bitfinex, FTX, Huobi and OKEx.

    12 months YTD Post March 12th
    Binance – BNB -19.88% 21.16% 97.61%
    Bitfinex – LEO 0.01% 32.09% 12.63%
    FTX – FTT 77.90% 42.32% 42.99%
    Huobi – HB 80.43% 50.90% 89.49%
    OKEx – OKB 226.24% 99.23% 110.48%
    AVERAGE 77.90% 42.32% 89.49%

    The best performing exchange token over the previous 12 months has been OKEx’s OKB, up 226.24% over the last 12 months. OKB has the best-performing exchange token across all 3 timeframes. Bitfinex’s LEO token has remained exceptionally stable over the last 12 months, sitting at a near identical price from a year ago.

    Exchange Coins
    The Exchange token sector has been the best-performing sector over the last 12 months proving their stability through being backed by revenue-generating entities.

    DeFi Tokens

    DeFI tokens are those tokens building decentralised financial networks on the Ethereum blockchain. Analysed tokens include those issued by Augur, 0x, Kyber Network, Gnosis and REN.

    12 months YTD Post March 12th
    Augur – REP -44.90% 22.28% 73.88%
    0x – ZRX -9.43% 33.33% 64.38%
    Kyber – KNC 193.05% 242.16% 79.32%
    Gnosis – GNO 18.84% 73.00% 136.96%
    Ren – REN 164% 106.25% 104.33%
    Maker – MKR -36.88% -22.89% 56.29%
    AVERAGE 4.70% 53.16% 76.6%

    DeFI tokens have been the best-performing sector in 2020 on a YTD basis. This rise coincides with greater media interest as we approach Ethereum 2.0. ETH 2.0 is touted to have a significant impact on the efficiency and usability of DeFI tokens, for which reason investors are anticipating significant project improvements.

    DeFi Tokens

    ETH Killers

    “ETH Killers” are tokens initially marketed as “new and improved” Ethereums, utilising smart contract technology to facilitate dapp development and decentralised finance innovation. Tokens analysed include EOS, Tezos, Cardano, Tron and Stellar.

    12 months YTD Post March 12th
    EOS – EOS -44.46% 3.43% 50.55%
    Tezos – XTZ 130.76% 106.10% 97.08%
    Cardano – ADA -23.79% 48.93% 42.02%
    Tron – TRX -35.74% 20.30% 88.23%
    Stellar – XLM -23.00% 61.60% 125.93%
    ETH (reference) 16.73% 58.93% 84.48%
    AVERAGE -23.79% 48.93% 88.23%

    The 12 month performance of ETH killers is being driven by a phenomenal year for Tezos, up 130.76% whilst all other analysed ETH killers are down a minimum of 23% over the past 12 months. All analysed tokens here are up on a YTD and 2-month basis.

    ETH Killers

    POS Coins

    Proof-of-Stake coins are those built around the innovative staking system for block validation within their networks. This is regarded as an extension to POW tokens, where token holdings are correlated with networking mining power. Those tokens analysed include Tezos, Stellar, NEO, Cosmos and Tron.

    12 months YTD Post March 12th
    Tezos – XTZ 130.76% 106.10% 97.08%
    Stellar – XLM -23.00% 61.60% 125.93%
    NEO – NEO 4.72% 6.65% 55.25%
    Cosmos – ATOM -40.79% -37.47% 62.80%
    Tron – TRX -35.74% 20.30% 88.23%
    AVERAGE -23.00% 20.30% 88.23%

    POS tokens have performed strongly across all analysed time-frames, with positive returns on a YTD and post-March 12th basis. Interesting developments are the 12 month performance of Tezos, up 130.76% due to increased media coverage and investor interest in roadmap developments. A second note is the YTD performance of Cosmos, down 37.47% whilst all other analysed tokens have positive returns in the same time frame.

    PoS Coins

    POW Coins

    POW coins are cryptographic assets which make us of the proof-of-work algorithm for block validation. In this system, miners compete against one another to complete network transactions, typically through energy-intensive mining set-ups. Analysed POW coins include Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Monero.

    12 months YTD Post March 12th
    Bitcoin – BTC 58.45% 29.38% 87.30%
    Ethereum – ETH 16.73% 58.93% 84.48%
    Bitcoin Cash – BCH -13.66% 19.60% 36.98%
    Litecoin – LTC -37.63% 10.59% 67.27%
    Monero – XMR -10.57% 31.90% 102.95%
    AVERAGE -10.57 29.38% 84.48%

    The POW sector is up across YTD and post-March 12th timeframes with Bitcoin and Ethereum leading the pack as the 2 POW tokens positive across 12 months, YTD and since March 12th. LTC – the 2nd best performing POW asset since the March 12th sell-off – is down 37.63% over the last 12 months and is the worst performing POW token since May 2019.

    PoW Coins

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