The uncertainty about the outcome of this high-profile fork and the viability of the two chains was a natural recipe for increased crypto volatility — and that uncertainty leading up to the fork remained as a driver of volatility after the fork, during the hashwar in which BCH and BSV competed for common hashpower and the future of both chains was unclear.

November 19th-20th: This spike followed on the heels of the SEC announcing on Friday the 16th that they had reached settlements with two multimillion-dollar 2017 ICOs: Paragon Coin and Airfox. This uncertainty about the future of other ICO-related crypto ventures likely contributed to driving marketwide volatility higher.

It’s also worth noting that even though the overall crypto market rose in absolute volatility during this timefame, BCH’s 30-day HV relative to BTC’s 30-day HV decreased. That’s probably due to the apparent resolution to the hashwar between BCH and BSV that occurred at this time: on the 20th, about a week into a protracted hashwar, Calvin Ayre, owner of leading BSV supporter CoinGeek, wrote that CoinGeek would “enforce civility” around the permanent splitting of the BCH and BSV blockchains and that nChain (the other major BSV proponent) intended to follow suit. More clarity around the future of BCH reduced uncertainty about the cryptocurrency, which also likely reduced its relative volatility.

November 28th: Crypto market prices began to recover as SEC chairman Jay Clayton reiterated at Consensus: Invest that BTC is not a security and therefore not subject to SEC regulations. NYSE chairman Jeff Sprecher spoke at Consensus: Invest, saying that digital assets such as BTC are “unequivocally” here to stay despite the current bear market. Danny Kim, Head of Growth at SFOX, also spoke on Yahoo! Finance, emphasizing that “institutions are still actively trading” crypto in the bear market. These reassurances about the longevity of BTC and institutional interest in crypto in the broader context of the current bear market could have stoked overall uncertainty about how much demand for crypto there really is, which could have driven volatility higher.

What to Watch in December 2018

Look to these events as potentially moving the volatility indices of BTC, ETH, BCH, and LTC in the coming month:

12/5/18–12/6/18: FinTech Connect 2018, London. This is the U.K.’s largest FinTech conference and tradeshow, featuring many major players in finance and much crypto-centric content.

This is the U.K.’s largest FinTech conference and tradeshow, featuring many major players in finance and much crypto-centric content. 12/12/18: Bakkt BTC futures begin trading on the intercontinental exchange (ICE). The ICE, backed by companies like Starbucks and Microsoft, aims to offer Bakkt as a means of making the trading of cryptoassets more feasible for Wall Street. This could increase crypto’s volatility by adding surplus crypto demand via an influx of institutional investing—an influx we’ve already been observing at SFOX.

The ICE, backed by companies like Starbucks and Microsoft, aims to offer Bakkt as a means of making the trading of cryptoassets more feasible for Wall Street. This could increase crypto’s volatility by adding surplus crypto demand via an influx of institutional investing—an influx we’ve already been observing at SFOX. 12/19/18: CBOE BTC futures expire. Historically, futures expirations have led to an uptick on BTC volatility, both leading up to and following the time of expiration.

Historically, futures expirations have led to an uptick on BTC volatility, both leading up to and following the time of expiration. 12/28/18: Trading of CME and BitMEX BTC futures contracts terminates. As the last major crypto futures expirations of the year, these have the potential to drive the volatility of BTC and other cryptoassets upward.

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