2017 Q1 Cryptocurrency Report Card Released: Is Dash’s High Score Fake?

In the first quarter of 2017, the top cryptocurrencies all experienced significant growth, with their overall market capitalization increasing by nearly $7 billion. The so-called "blue chip" cryptocurrencies (those with a market capitalization of more than $30 million) performed particularly well in the first quarter, while Bitcoin's growth was slightly weaker and its dominance was reduced. At the same time, newer cryptocurrencies began to show their growth strength. The average price growth rate (in USD) of the other 13 cryptocurrencies in the first quarter was 111.66%.

The winners of the Blue Chip Best Performance Award in the first quarter were Ethereum (ETH) and Dash, with price growth rates of 600% and 846% respectively.

On March 17, Ethereum performed particularly well. According to data from CoinMarketCap.com, on March 17, the price and daily trading volume of this cryptocurrency hit new all-time highs, at $55.11 and $554 million respectively. With the integration plans of multiple exchanges , Ethereum has expanded its territory and been widely launched, and the trading volume has greatly increased. There are reasons for such a brilliant performance. However, it is not possible to trace the specific reasons.

In the first quarter, the Enterprise Ethereum Alliance (EEA) was established, which aims to develop blockchain applications using a customized version of the Ethereum protocol. The members of the alliance include CME Group, JP Morgan, BNY Mellon, etc.

In addition, the alliance will work with ConsenSys and Tendermint to verify the development of the code. Dash, known for its high confidentiality, has also shown a surge, but as of now, the reason for the growth is unclear.

The situation is reminiscent of Bitcoin in 2013. Dash’s market value “soared” to nearly $600 million in the first quarter.

At the beginning of this year, the price of Dash was only hovering around $11.26, but by March 19, its price suddenly rose to $109.82, and the average daily trading volume reached $78 million.

The price increase proves one thing to us:

Dash has a successful management model : 10% of the block reward will be invested in the proposals voted by the community. Due to Dash's good performance, Bitfinex decided to re-list Dash trading on March 3. Previously, Bitfinex suspended the trading of this cryptocurrency on the platform due to low trading volume. It has been more than a year and a half since the reopening. However, at the end of the first quarter, Dash's bubble signs weakened, falling from its peak on March 19 to $75.6 on March 31. Some analysts believe that most of Dash's trading volume is fake. They say that the actual average transaction volume of this cryptocurrency is only $4,000.

Bitcoin’s winding road

In the first quarter, Bitcoin's report card was not so good. CoinMarketCap has set up a Bitcoin Dominance Index to compare the market share of Bitcoin and other cryptocurrencies.

The index fell by nearly 20%, ending the first quarter at 68%. The decrease in the Bitcoin Dominance Index can only mean one thing: more investors are turning to other cryptocurrencies. Bitcoin's price growth in the first quarter was only 10%, which is worth noting, compared to 35.4% in the fourth quarter of 2016. It's really astonishing.

The fear, uncertainty and doubt that permeates the Bitcoin community can be attributed to Bitcoin's poor performance and a sentiment gap (when you compare Bitcoin to other cryptocurrencies). It may also be related to a sentiment - Bitcoin is gradually growing and maturing, and people are slowly seeing it as a risk-averse asset. So it is not surprising that volatility has subsided.