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DJ KR1 plc Extreme Volatility in Bitcoin and Digital Asset Markets

 
TIDMKR1 
 
13 March 2020 
 
                                    KR1 plc 
                           ("KR1" or the "Company") 
 
            Extreme Volatility in Bitcoin and Digital Asset Markets 
 
Yesterday, Bitcoin and other cryptocurrencies saw extremely volatile markets, 
with Bitcoin seeing its second worst day of returns in Bitcoin's entire trading 
history, with a percentage daily drop that has not been seen since 2013. 
 
While previous extreme volatility events featured a fairly strong fundamental 
basis of reasoning around the price discovery on those respective days, i.e. 
the MtGox Exchange hack and Bitcoin theft in 2013 or the rejection of the first 
major Bitcoin ETF proposal by the SEC in early 2017, yesterday's market 
volatility does not suggest any strong fundamental reason around the extreme 
move but points towards nothing but market mechanisms. A sell-off triggered an 
avalanche of liquidations on exchanges like BitMEX, Bitfinex and Derbit, which 
allow for leveraged trading and complex derivatives around the Bitcoin price 
and other cryptocurrencies. This led to a recursive breaking down of liquidity 
on other prominent exchanges in the cryptocurrency ecosystem that was amplified 
by transaction congestion on a number of blockchains, due to the limited 
scaling capacities, meaning market participants were not able to deposit 
reserve funds in time. 
 
KR1's long-term investment approach remains unchanged and we are seeing many 
truly disruptive and innovative projects in the Ethereum, Cosmos and Polkadot 
ecosystems with funding rounds finalizing soon. 
 
KR1 has been monitoring the situation closely since yesterday morning, and the 
Company wants to assure shareholders that none of KR1's assets were liquidated 
or threatened by the extreme volatility. However, as expected, the portfolio 
experienced a price shock of the underlying assets throughout the night that 
slightly recovered by this morning. 
 
KR1 is also pleased that the Companies' staking strategy has been performing 
very well and most staking proceeds were realized in recent weeks, before the 
price drop. KR1 will update on the Company's staking activities shortly, after 
the first full-year from launch of the Cosmos Network, detailing 12 full months 
of staking activity. 
 
George McDonaugh, Managing Director & Co-Founder of KR1 commented: 
 
"Bitcoin saw an extreme roller-coaster ride yesterday, starting around $7,800 
USD down to just under $4,000 USD in a very short space of time. With a rebound 
of sorts back to $5,600 USD overnight, repercussions of this move could mean 
further volatility in the short term. Fundamentally, however, our long-term 
outlook remains strong, and when  confidence eventually returns after this 
Black Swan event has stabilised, we expect crypto markets to maintain their 
overall upwards trajectory as demonstrated over the last few years. A 
fascinating result of yesterday's volatility can be observed in Ethereum's 
Decentralised Finance (DeFi) ecosystem, which has just gone through its 
strongest stress test to date and generally performed as intended. While I 
expect there to be a range of post-mortem analyses, the experimental world of 
DeFi will continue to thrive." 
 
=-ENDS-- 
 
For further information please contact: 
 
KR1 PLC 
George McDonaugh                                      +44 (0)16 2467 6716 
Simon Nicol                                                 simon@KR1.io 
 
Peterhouse Capital Limited                 (NEX Corporate Adviser) 
Mark Anwyl                                                  +44 (0)20 7469 0930 
Allie Feuerlein 
 
Nominis Advisory Ltd                              (PR Adviser) 
Angus Campbell                                          pr@KR1.io 
 
 
About KR1 plc 
 
KR1 is a leading digital asset investment company supporting early-stage 
decentralised and open-source blockchain projects. Founded in 2016 and publicly 
traded in London (KR1:NEX), KR1 has built a notable reputation for generating 
significant returns by investing in many key projects that are designed to 
power the decentralised platforms and protocols that are emerging to form new 
internet infrastructures. 
 
www.KR1.io 
 
 
 
END 
 

(END) Dow Jones Newswires

March 13, 2020 07:25 ET (11:25 GMT)