Crypto Mayhem: The Month For Giving Back

For most of us, the month of May is something to forget. The lingering question: was April’s spectacular crypto price performance a sign of a reversal in the 2018 crypto downturn or just a savage trick designed to draw us back into a buying mode?  Whatever the answer, May did little to restore confidence.

For what any opinion is worth, I believe things will be getting better soon.

No matter how much we believe in the gospel of relative value, literally every coin and token underperformed.  The weighted average of the 10 largest cryptos declined just over 20% in May compared to about a 4.5% gain for the Nasdaq Composite. That is a freakish event. 

The best place to be in a bad crypto market were the names perhaps most familiar to the average investor.  As of this writing, Ethereum. was down 18% for the month while bitcoin and bitcoin cash are off by 22% and 21%.

As painful as that is, it beats TRON (-40%), Stellar (-39%) or Cardano (-41%).  Please keep in mind, these numbers could change in a heartbeat: this is simply the normal volatility we have grown to take for granted.

The Regulatory News Hasn’t Been All That Bad

Way back last year investors were bombarded weekly with unexpected regulatory threats that many blame for the big Q1 2018 crash.  Lately the regulatory front has been quiet. For example, CNBC that fancies themselves as “Your guide to cryptocurrency regulations around the world and where they are headed” hasn’t published a word on the topic since March 27. Wow, that is practically world peace on the regulatory front.

If anything, last year’s defendants in the regulatory legal battle are starting to become the plaintiffs.  On 15th May, law firm Berns Weiss LLP filed a motion seeking to invalidate a November 2017 IRS summons to Coinbase. The U.S. tax agency is seeking records on Coinbase’s bitcoin users in a bid to catch potential tax cheats.  The motion was filed on behalf of two unnamed Coinbase customers. Finally, some power to the people.

What Are The Positive Takeaways From May

For this edition, we want to focus on three names that stand out from the crowd in light of their performance over the past few months: bitcoin cash, ethereum and EOS.  Of the top 10 largest cryptos that represent about 75% of all assets in this class, these three are showing the best strength.

Giving awards for two assets that seriously underperformed in May is like giving out participation trophies in Little League baseball.  Bitcoin cash closed down about 21% while ETH was off by 18%. What distinguishes this awful performance is that both crytos popped up over 73% in April.  In other words, these are two cryptos that are still in an intermediate term uptrend. So they should be kept on your focus list going forward.

EOS enjoyed such a spectacular month of April that nothing else much mattered. Here are a few fundamental highlights from May on each.

Bitcoin Cash

Bitcoin cash made important upgrade news, increasing block size from 8MB to 32MB on May 15. also announced that this is the first of several planned upgrades for the currency.  This is a sizable step forward in scalability; the exact type of development that gives investors reason to own bitcoin cash.


The price of ether was one of the few cryptos showing positive performance for the month of May.  Stories began explaining a massive selling of ether by EOS via Bitfinex. It will be recalled that EOS was the third largest ICO in 2017 amassing $182 million in Etherrun.  Recently reports headlined the possibility of EOS dumping its ETH. According to one report: some 180,000 ETH exchanged hands in a single hour on Bitfinex, up from around 20,000 the previous hour.  That 20,000 level is about what other exchanges handle in ETH on an hourly basis.


The price of EOS may have given up nearly 30% in May but that is minor in comparison to the near tripling in value in April.  Over the past two months, the value of EOS has nearly doubled. Fans of EOS, including myself, respect its serious challenge to Ethereum. It’s decentralized parallel processing system provides the core functionality for business to build blockchain applications while its ownership model promises to eliminate transaction fees.  That is serious stuff even without going into all the techno detail.

What stands out with EOS is how its price has held up given the recent news about EOS’ planned mainnet launch scheduled for June 2.  The largest Internet security company in China, Oihoo 360, claimed to identify a series of high-risk security vulnerabilities that could cripple the entire EOS network.  

Fortunately for EOS investors, the EOS development team responded by isolating and repairing the flaw.  In many ways, the fact that the price of EOS didn’t take a serious shellacking speaks to the strength of its investor following.

Featured image courtesy of Shutterstock. 

James Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.