Last month's Bitcoin crash pulled many Altcoins into a negative price movement. On the other hand, there are indicators that a new Altcoin season is approaching. This raises the question whether there is a future for Altcoins. Let's try to give an answer.
In addition to Bitcoin, there are numerous Altcoins. There are about 1,600 different crypto coins that are handled at larger crypto fairs. Among them is a market of numerous Altcoins trying to get to the larger exchanges. The question is how useful that is.
Let's start at the beginning. How much space is there for all the Altcoins together? Let's get some numbers straight.
What room for growth is available for Altcoins?
If we look at the current state of affairs (3 November 2019), we see the following key statistics via Tradingview:
- The market capitalization equals $ 238.1 billion;
- The trading volume is 70 billion;
- Bitcoin (BTC) has a market share of 69.77%, followed by Ethereum (ETH) with 8.28% and Ripple (XRP) with 5.31 %.
On the basis of these data, we can easily conclude that the top 3 of the market dominates 83.4% of the market. This means that for many crypto coins it will be very difficult to achieve an attractive market share and thus become really interesting for investors. However, it would be too early to write off Altcoins.
How are Altcoins performing at the moment?
Analysts calculated that the major altcoins have outperformed Bitcoin for 7 weeks in a row.
This means, therefore, that there is definitely room for Altcoins to develop further and that investors also give that confidence.
What's the trend with cryptocoins?
The first trend we are seeing is the downgrading of interests. During the crypto boom of 2017, many coins were (too) highly valued. As a result, dozens of crypto coins had a market capitalisation of one billion or more. If we now look at the overview of live prices, there are only 13 crypto coins with a market capitalization of a billion or more.
The second trend is the rapidly declining volume in relation to market capitalisation. Sorting the top 25 crypto currencies by volume, the most traded Tether (USDT) currency has a volume of 18.8 billion, while the number 25 Iota (MIOTA) has just over 4 million.
In addition, we see that many Altcoins have a tendency to follow the Bitcoin in price movements, the so-called correlation. There are few autonomous price developments.
Conclusion: future prospects for crypto coins on exchanges limited
On the basis of these data, it is obvious that there is certainly a future for Altcoins, but that the market is currently congested with many small players who have a limited right to exist on the basis of volume. In addition, much larger Altcoins lose in market capitalization and (too) often follow Bitcoin.
A shake-out of weak links is required to build up a strong competitive position in relation to this Bitcoin. In addition, there seems to be a need for a disruptor, which is not dependent on Bitcoin for the development of its share price, but can also mobilize such a large constituency that a substantial market share (in terms of market capitalization and volume) can be conquered.
