Will altcoins die in 2020? Bitcoin dominance is growing

Liquidity is important to attract crypto traders because without a high daily trading volume, there is little to trade. At the moment, 95% of all altcoins have a much too low volume to attract new traders. Many will die a silent death.

Contents hide

1 2019 was not a good year for altcoins

2 Tide doesn’t seem to be turning

3 There are exceptions

4 Related posts:

2019 was not a good year for altcoins

Last year was not a best year for altcoins. Many coins are worth much less than at the start of the year. XRP is a well-known example of this. But at least Ripple still has a high trading volume, which means that thousands trade in XRP every day.

The fact that it was not a good year for most altcoins is also reflected in the growing bitcoin dominance of last year. At present, that figure has grown to 70%, which means that almost three quarters of the entire cryptomarket consists of bitcoin.

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The dominance of bitcoin has only increased during the year.

Tide doesn’t seem to be turning

For the time being this tide does not seem to be turning. This can ensure that the liquidity and volume of many altcoins will only fall. There are 4,960 crypto coins and tokens on Coinmarketcap. Only the top 50 altcoins have significant liquidity. Earlier this year, crypto analyst Willy Woo looked at the liquidity of altcoins and discovered that no less than 99% is illiquid.

Coinmarketcap lists 4978 coins. Here’s the top 50 by volume. Below the top 40 doesn’t even register, i.e. 4938 coins are illiquid.
Investors because liquidity at entry and liquidity on exit. Very few coins have credible liquidity to be good investments. pic.twitter.com/3kXgn3NWjV

– Willy Woo (@woonomic) November 13, 2019

Larry Cermak, the research director of The Block has made a new version of Woo’s research. He also says that most altcoins go down to zero. We are not talking about price, but about liquidity.

Following similar analysis by @woonomic, I looked at the liquidity of cryptocurrencies (using @coin paprika‘s data). 95% of cryptocurrencies currently have no liquidity and another 2% very little liquidity. Most of shitcoins won’t die by going to 0 but by having no liquidity pic.twitter.com/Efr2LdD93l
– Larry Cermak (@lawmaster) December 23, 2019

Bitcoiner Udi Wertheimer added that the value of a token or altcoin cannot go to zero, provided that a price is still agreed by buyers and sellers. The deaths are therefore expressed in zero liquidity, and in 2020 that can be thousands at the same time.

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There are exceptions

Even in the top hundred, the volumes are very low for the coins that are dangling below. For example, Bytecoin, Electroneum, Crypterium, SNX, SOLVE and Centrality. If you look even further on the list, you will literally see thousands of altcoins without liquidity.

This of course does not mean that all altcoins are doomed to fail. Many coins did good business in 2019. Despite all the FUD news, Litecoin still rose by 13%. Binance Coin, Tezos, Chainlink, Huobi Token, VeChain and BAT can also provide nice and green figures.

But the coins that want to survive 2020 must be actively traded to remain liquid. And the rest? We will see this at deadcoins.com at the end of 2020.