In the rampant 2020/21 Bitcoin bull run to $50k and beyond, Cardano (ADA) was elevated into the top three cryptocurrencies for the first time, amassing a market cap of more than $39bn.
Also lifted into the top 10 coins was Binance’s stablecoin Binance Coin (BNB), providing users with a fiat on-off ramp to its massive exchange.
As the best known cryptoexchange with the widest variety of altcoin markets in play (Kraken offers trading on 56 coins, Coinbase supports 49, and Binance has 253 and counting), this growth is not particularly surprising. It’s also worth noting that on its irrepressible march to retail investor domination that Binance actually bought CoinmarketCap.com in April 2020 for around $400m and ousted its leadership team.
Anyway, we thought it would be interesting to look at how the composition of the world’s most valuable crypto projects has changed over time. We can use the Wayback Machine to take a snapshot of CoinMarketCap data over the years to reveal some pretty interesting conclusions.
Bitcoin’s movement from an asset worth $1bn to $1trn across the years will of course capture the most attention. But it is the changing nature of all the crypto projects that swirl around in its orbit that tell us the most interesting things about how markets have developed and matured.
The earliest date that CoinMarketCap.com was crawled was May 9, 2013. For all subsequent years we’ll be using the closest available date to March 3. Naming conventions had not yet been established, so in the earliest days you’ll see ‘Crypto Currency’ appears as two separate words, gradually morphing to a hyphenated ‘Crypto-Currency’ and then on to the ‘Cryptocurrency’ we know and love today.
Source: CoinmarketCap.com - May 9, 2013
In 2013 only 14 coins were listed: Bitcoin, Litecoin, PPCoin (later Peercoin), Namecoin, Feathercoin, TerraCon, DevCoin, Freicoin, Novacoin, CHNCoin, BBQCoin, MinCoin, BitBar and IxCoin. Remarkably most of these projects are still around today in one form or another, but only two of the top 10 still remain there: Bitcoin and Litecoin.
All were highly experimental, open-source, maintained by volunteers, and developed or forked from the original Bitcoin codebase. They had varying degrees of utility. Freicoin for example, was a project more in keeping with the anti-Wall Street, anti-banker philosophy of Bitcoin in its early iterations and was “designed to address the grievances of the working class and re-align financial interests of the wealth elite with the stability and well-being of the economy as a whole.”
Freicoin’s so-called ‘demurrage fee’ apes the block rewards we’re familiar with today: those who ensured the cryptocurrency’s circulation and contributed work to secure its blockchain were paid in that native currency.
In these innocent early days, a coin or token could sneak into the top 10 most valuable cryptocurrencies with a market cap of less than $1m. As of March 3 2021, nearly 800 projects are valued at $10m or more, with 1,430 worth upwards of $1m, although the daily trading volume in coins this far down the list is either miniscule or non-existent.
What’s interesting to note is that despite a handful falling by the wayside, a proportion of the lesser-known coins in this top 10 still saw some impressive gains over this period. Buy and hold $5,000 of Feathercoin in 2013? You’d be sitting on 692% gains and around $35,000. The main issue would be finding an exchange that still trades the coins and then sourcing a buyer. This kind of thin liquidity — a concentration of wealth in the hands of so called ‘whales’ and a lack of buyers and sellers — still dogs many projects to this day.
Still, it puts an interesting spin on ‘altcoin season’ for more traditional investors wary of moving away from their Bitcoins and Ethereums. Perhaps they should be looking a little further down the market cap list for a risk-reward play.
Skip ahead to 2016 we start to see some of the names we’re more familiar with in today’s market. We have meme favourite Dogecoin (DOGE) in with a $25m market cap, the ever controversial Ripple (XRP) which appears at a $273m valuation, and privacy coin Monero (XMR) just making the top 10 cut. The main event of the previous year was the creation of Ethereum, and its appearance here the second-most valuable crypto project is a position it still holds. Back then, Ethereum traded for a little over $8 and sported a market cap of $633m. Surprisingly enough, the Scottish data decentralisation coin MaidSafeCoin (MAID) is still hanging around among the most valuable projects.
By this point in time the number of crypto projects had exploded to 690, with each traded across 2,094 exchanges and peer-to-peer marketplaces.
2016 was also the first appearance in the top 10 of Monero. Privacy coins like XMR and ZCash (ZEC) have fallen out of favour somewhat today. Once a staunch top-10’er, Monero now sits in 23rd place and Zcash outside the top 50 crypto projects by market cap. Since 2018 the US Secret Service has been asking for help to prevent the illicit use of privacy coins specifically designed to hide the source of transactions.
And blockchain analytics firm Ciphertrace — they of the FATF Travel Rule solution fame — has been tracing Monero alongside assistance and funding from the Department of Homeland Security. It was a 2019 Ciphertrace report that found two-thirds of the world’s 120 top ‘Virtual Asset Service Providers’ (to use the FATF terminology) had inadequate AML/KYC checks in place.
That’s changing fast. Better on-chain analytics, more resources devoted to transaction tracing and the kind of transparency demanded by regulators worldwide have fundamentally altered the landscape.
The pseudonymous nature of cryptocurrency transactions, the early inability or unwillingness to carry out standard anti-money laundering Know Your Customer and Know Your Transaction checks has changed. As more institutional investors have come into the fold, privacy coins and those projects that bundle up transactions and ‘mix’ or hide their origins are likely to fall by the wayside.
2017 was the first year Coinmarketcap.com started to record Bitcoin dominance and it was overwhelming at 85.3% at the time of our data snapshot. At this point there were 718 crypto coins and assets being tracked across 2,495 markets.
By 2018, Bitcoin dominance had plummeted to 39.8% as retail interest rocketed, showing key interest in a deeper, broader investing space, with almost double the number of coins listed (1,523) across four times as many exchanges and marketplaces (8,646).
Skip to 2019 and we’re looking at a totally different blend of crypto projects coming to prominence. By now Bitcoin had re-asserted its authority at a dominance of 51.8%, while the number of marketplaces again doubled to 16,188.
It’s largely a tale of a shift away from prominent coins trading at a fraction of a cent, while projects with a more than $1bn market cap now making up 8 of the top 10.
It’s also the first appearance of Binance Coin (BNB) and Tether (USDT), the latter of which critics point to as the leading factor behind the explosion in the total market cap of all crypto projects. Looking back to the growth of the market between 2013 and 2017, though, seems to discount this theory. You’ll note that there has been some pretty heavy solidification of power base in the most popular crypto projects, with none of the top 10 in 2019 falling outside the top 30 by 2021.
So to this year. Along with BNB and Cardano we are seeing DeFi-specific projects like Uniswap (UNI) price feed oracle Chainlink (LINK) and interoperability blockchain Polkadot (DOT) command a high price. The likes of 2020 favourites EOS and TRON, have fallen away, suggesting greater power consolidation in the hands of Ethereum with its DeFi and NFT applications.
With the retail explosion of NFTs, it’s likely coins in this sphere will inch their way into the top 10 cryptos by market cap in the coming months too.
Over the last 10 years cryptomarkets has broadened from peer-to-peer cash alternatives into a complex web of interrelated projects, with a specific focus now on utility rather than simple speculation. This ecosystem will only grow from here. And while early critics suggested that regulation would be the death of crypto, it has become clear that the market is malleable enough to change when it needs to and ensure its long-term prosperity.
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