I’ve been watching the price action of 3 public companies (GLXY, HIVE and ETHC) who are participants in the crypto ecosphere . Over the past week or two, there seems to be some divergence of their share price behavior away from that of BTC and ETH. It has investors confused. As of writing, ETH is hitting all time highs ($2630 USD) and BTC has rebounded from a correction ($54,714).

It is my contention that as the cyrptospace matures companies will still trade highly correlated to crypto markets they participate in (as a nickel miner would trade correlated to the price of nickel) but company, management and strategic fundamentals of a business will start to also impact the share price.

In essence…..companies will be increasingly judged based on their operational and strategic merit. Not just as proxies for asset values.

Is the most recent divergence of crytpo prices away from share price action indicative of this? Well…..maybe. In the short term (a month or less) we can see this happening. But over a six month period, we see something else.

Check out the charts on GLXY, HIVE and ETHC as compared to the cryptocurrency Ether over a 6 month period

Although in the past week and month the share prices seem to be diverging from the performance of cyrpto currencies, over a six month period we see convergence.

In the case of GLXY and HIVE, we see the SP weakening, trending towards the ETH price, while we see a strengthening trend in ETHC share price, moving towards the ETH price.

These charts remind me of what often happens to the share prices of gold and other miners when their performance deviates away from their primary asset. Oftentimes they revert to the mean (or price performance of their underlying asset).

So, my very unscientific conclusion is that the correlation between ETH and these companies SP performance is still very much alive. And that the correction that has occurred in GLXY and HIVE share prices, and the upward pressure on ETHC, is a type of reversion to the crypto price mean.

The DTM5 isn’t too concerned with this either way. But it sure is interesting and perhaps forms the basis of a good trading concept. (Although reversion to the mean is not exactly a new concept LOL). I’m long on the cryptosphere in general and the Ethereum network in particular. I’m happy to watch and learn as things evolve.

And full disclosure – I own a bucketful of GLXY and ETHC, and continue to acquire. The DTM5 is a former holder of HIVE, and still admire what they are achieving.

GLTA!