The great cryptocurrency bear market of 2018 may have put a damper on speculative investor interest in this nascent asset class, but it does not seem to have led to much of a slowdown in the number of new altcoins being released on the market.
To wit, cryptocurrency resource site CoinMarketCap hit a new milestone on Friday, as its market cap rankings now include data on more than 2,000 active coins and tokens, an increase of more than 600 since the beginning of 2018.
A significant percentage of this increase stems from the increasing popularity of tokens, cryptocurrencies which run on another coin’s blockchain and are secured by its network. Even projects which eventually launch their own blockchains now often start as initial coin offering (ICO) tokens on Ethereum, Stellar, or another network.
At the time this article was written, CoinMarketCap had 2,008 cryptocurrencies listed on its market cap index. The site does not provide data on how many cryptocurrencies it delists, but, according to its website, indexed projects must be listed on a public cryptocurrency exchange with a functional API and have non-zero trading volume.
That’s not a high bar. PayCoin, an outright scamcoin whose founder was recently sentenced to 21 months in prison, has managed to cling to a $157,000 market cap on the back of $7 in daily trading volume.
Even so, the attrition rate is not insignificant. For instance, three of the 10 largest cryptocurrencies on May 9, 2013 — the earliest date that the Internet Archive’s Wayback Machine crawled the site — are no longer listed on the site. Inexplicably, a cryptocurrency called “BBQCoin,” which was ranked 11th on that date, didn’t manage to achieve mainstream adoption.
With so many cryptocurrency projects actively throwing their hats into the ring on a daily basis, it’s even more remarkable that bitcoin — the project that started it all — still accounts for such a large share of the overall market.
As of Friday morning, bitcoin controls a 52.1 percent share of the cryptocurrency market cap. In other words, BTC is not only the most valuable cryptocurrency but is also worth more than the other 2,007 combined.
This hasn’t always been the case. After holding a 97 percent market share in late 2013, bitcoin dominance experienced a moderate decline over the next several years but consistently held above 80 percen. That changed in 2017 when — bolstered by the emergence of ICOs — ethereum briefly challenged bitcoin for its crown. At one point, altcoins controlled two-thirds of the market cap, but this year’s bear market has cemented bitcoin’s dominant position in the crypto ecosystem.
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Last modified: June 14, 2020 11:04 AM UTC