INSUBCONTINENT EXCLUSIVE:
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we&re peeking
at what gone on in the world of altcoins recently, the other cryptocurrencies aside from bitcoin.
As 2016 came to a close, altcoins like
ether and XRP saw their value soar
Toward the end of 2016 through early 2018, bitcoin relative share of the aggregate value of all cryptocurrencies fell to about a
third.
Since then there been a reversal
Bitcoin is not only back over the 50% market share mark, it has effectively doubled its portion of crypto worth over the last two
years.
What happened? Why altcoins have struggled isn&t something we can answer with a single data point or chart
But we can highlight a few reasons that help explain what happened
We&ll start with a look at the data and then we&ll highlight three ideas concerning what changed that pushed altcoins down, and bitcoin back
up.
Over the past few weeks we&ve spent most of our time digging into IPOs, larger startups, stocksand revenue thresholds
Today we&re expanding our horizons a bit, looking at a market that sits somewhere to the side of our usual public-private divide
We&re having fun!
First words
Let start with a few caveats to save tweets.
We all know that comparing the value of a cryptocurrency or token
isn&t the only way to stack blockchains against one another
We also also know that comparing market caps isn&t a perfect way to examine the market
And, yes, there lots of development work that goes on behind the scenes that doesn&t show up in the data we are going to examine.
That said,
we&re nearly 11 years into the bitcoin era
We care a bit more today than we did a half-decade ago about what is, versus what might be.
Comparative worth
From the fine folks over at
CoinMarketCap, the following set of data maps the relative value of the major cryptos, with smaller coins aggregated into a shared line:
I
know it the day after a major holiday, so let help out
The big orange area is bitcoin
The 2017-2018 era is the period in which altcoins had their heyday
And since mid-2018 you can see bitcoin recapture most of its lost, relative prominence.
Bearing in mind that the value of bitcoin has traded
as high as roughly $20,000 in late 2017, and is worth about $7,400 today, the chart doesnot merely show bitcoin recovering its former value
But it does show how over the last two years bitcoin share of the value of traded cryptos has doubled
Here are the key data points:
December 15, 2016, bitcoin share of total crypto market cap: ~86%
December 15, 2017, bitcoin share of total
crypto market cap: ~55%
January 15, 2018, bitcoin share of total crypto market cap: ~33%
December 15, 2018, bitcoin share of total crypto
market cap: ~55%
December 15, 2019, bitcoin share of total crypto market cap: ~66%
More simply, bitcoin share of the value of all cryptos
held steady above 80% for a very long time
Then in early 2017 that same share began to fall
It continued to slip into the early days of 2018
Since then it recovered first to its December 2017 levels
And this year the relative value of bitcoin rose again, bringing it to twice its lowest ratings.
Why did that happen? Here are three reasons
that form a part of the why.
There and back again
For those of you with pie to eat, here our arguments upfront
Bitcoin bounced back due to:
The failure of distributed apps to take off in terms of usage, and spend;
The general nonperformance of ICOs;
A
fraud-led flight to quality.
