Last year was the worst time for half of the altcoins analyzed. The results could reflect that there is no need to have multiple cryptocurrencies.
Many major alternative cryptocurrencies have performed well against the US dollar but not against BTC. However, it is difficult to say whether or not this is the worst year that altcoins have experienced. By examining the price data associated with some of the most popular and oldest altcoins in the market, an analysis could be performed for both 2018 and 2019.
Of course, measuring the whole altcoin market can be somewhat difficult, since enthusiasts and traders may change their minds regarding new cryptocurrencies monthly. According to Messari, BTC had a real exchange volume of just under USD 500 million at the time of writing this article. Besides, popular altcoins such as Bitcoin Cash (BCH) and Dash (DASH) each had only USD 26 million and USD 11 million in real trading volume, respectively.
Ethereum (ETH) is the main outlier concerning the level of financial activity of a cryptocurrency network in relation to BTC, with around USD 410 million. Having said that, ETH’s 24-hour on-chain adjusted transaction volume is less than one-fifth that of BTC. Besides, the increase in ETH trading volume found in exchange houses like Binance seems to be a relatively short-term phenomenon, according to TradingView.
Ripple (XRP) and Stellar (XLM) were not included in that analysis, since their qualification as cryptocurrencies is considered questionable. It should be noted that XRP is the only major cryptocurrency that has fallen against the US dollar this year.
Other very popular cryptocurrencies, such as EOS and Tron (TRX), do not have records of sufficient length to be considered. Altcoin markets are so volatile and shallow that it is too difficult to get any meaning from them during the first days. EOS and Tron have followed the overall trend of altcoins by falling sharply against BTC since early 2018, according to Coin Metrics.
LTC, the oldest altcoin still traded, has fallen 66.73% in relation to BTC in the last six years, which means an eternity in the world of Bitcoin and blockchain technology. Zcash (ZEC) also faces this problem and probably shows the worst reality, measured against BTC, since its launch in October 2016.
ETH and ZEC are the only two covered alternative cryptocurrencies that have fallen more in 2019 than in 2018 against BTC. According to the study, last year was the worst on record for half of the alternative cryptocurrencies analyzed.
There have been exceptions in the altcoin bear market in 2019, such as Binance Coin (BNB) and ChainLink (LINK), which have risen substantially compared to BTC. LINK also rose over 800% against the US dollar at a certain time. Of course, it is unclear whether these bullish movements in price called BTC of BNB and LINK will stand the test of time.
Where Altcoins Go
CoinMarketCap indicates that the Bitcoin Dominance Index (BDI) of altcoins, which measures BTC’s share in the cryptocurrency market worldwide, reached a fund of around 33% in January 2018, growing to about 67.2% since then.
Altcoins really have nowhere to go, but that they go up when they are first launched. Their extremely low levels of liquidity means that not much money is needed to move the price. Thus, the altcoin market has been nothing but a “giant bubble,” in line with the concept appeared in early 2018.
By Willmen Blanco