Bitcoin falters, but holds firm, solid on its fundamentals forged to change the world; Ethereum trembles, but resists, even if it is still feverish and exhausted from its rrecent open heart surgery. Made up of the TOP 100 of the marketcap, the court of the King of cryptocurrencies and the prince of tokens is experiencing varying fortunes and is trying, somehow, to resist the frosts of this year 2022. horribilis.
And, in the face of the blizzard, even the most solid and resilient projects agree: times are tough for the multiple representatives of the magic currency of the Internet. But far from the media limelight, beyond the Great Wall of the North and the top 1000 places in the crypto asset rankings, what do we find? Diving into the depths of marketcap between lost illusions, crypto-zombies and stillborn projects.
Live ammunition satyr
It will have escaped no one that if the crypto market had everything from the land of Plenty in 2021, 2022 quickly transformed it into a huge open-air shooting range for the unfortunate who would have ventured there on a misunderstanding, and without adequate safeguards.
The less experienced investors were obviously the first to fall on the field of honour. Quickly followed, however, by some of the biggest names in the industry, mowed down in the middle of the race, one by cluster munitions leverage, the other by a land mine stuffed with shitcoins with cute dog heads, as deadly as they are colorful, or finally more simply driven by a feeling of impunity and invulnerability as illusory as they are fatal (we embrace – or not – Alex and Do Kwon).
Shitcoins, shitcoins everywhere
And as ammunition in this huge game to make the most naive or the most greedy lose money (these two characteristics are often provided in packs), multitudes of cryptocurrencies, coins, or tokens, appeared as quickly as disappearedcarrying with them the dreams of easy fortunes of their unfortunate holders.
“Flash get rich fantasies are temporary, shitcoins are forever” would say the wise (if we found the slightest in our young industry which sometimes has trouble learning from its own misadventures, I remind you that we live in a world where LUNA Classic exists).
Be that as it may, if the average investor sometimes learns the lessons badly (the wounds of money being, it seems, not fatal, obviously pushing some to take themselves for Wolverine), the blockchain does not forget anything. It is thus easier to go and observe the state of the battlefield yourself and to see its extent by simply walking on Coingecko or CoinmarketCap.
A brief history of dominance
Before going any further, a brief reminder of the notions of total market capitalization and market dominance. Bitcoin and Ethereum.
The total capitalization of the crypto market is currentlyjust under a trillion dollars. That’s 1000 billion dollars ($1000,000,000,000) which is not negligible. But, however, down 65% compared to the ATH (all time high) of 3 trillion dollars dating from barely… 10 months.
The situation is, of course, not specific to the crypto sector, it’s all the financial compartments that have been expensive in recent months but, let’s face it: it’s a little tight.
Bitcoin dominance
The bitcoin dominance is the relative share of the cryptocurrency taulier compared to the total market. It is currently around 38% (i.e. $374 billion). Let’s move on to Ethereum which with 16% and 159 billion capitalization is still far from Bitcoin “pinball” (although it still “freaks out” some maximalists, do what you want with this dodgy joke).
For demonstration purposes, let’s finally add to this set the volume of the main stablecoins, namely USDT, USDC, BUSD and DAI for a total of approximately another 140 billion.
Total: $547 billion. That is 55% of the entire cryptocurrency mass in circulation. The calculation is rough, but it gives you an idea of the forces involved.
6 crypto assets (including 4 stable) therefore share 55% e the entire industry value. And, as you are good at math, you immediately deduced that the remaining 45% is shared… among all the other players in the market. And, you will quickly see that this sharing is anything but balanced.
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trillion shitcoins
CoinGecko is currently tracking a bit more than 13,000 cryptocurrencies.
Generous, Coinmarketcap exposes for its part the courses of 21,000 active (even if for the latter, it is complicated to search beyond rank 10,000, probably a form of modesty).
What should be noted above all is that the marketcap, a bit like a city in the 21st century, is made up of different areas:
- The historic centerwith the great Bitcoin and Ethereum monuments and the large bourgeois buildings of the moment (currently Solana, Cardano or Ripple);
- The residential and business bobo districtsroughly the top 100 marketcap (500 million – 1 billion capitalization), the atmosphere is lively, growth continues, including in difficult market conditions, coexistence is generally peaceful;
- Up to rank 500 (about 30 million marketcap), neighborhoods are becoming more popular, more contrasted. Beautiful places coexist with wastelands. The potential is sometimes there, but a deterioration is always to be feared;
- Bordering these zones, one quickly falls into the hot suburbs rank 1000. Environments that can become dangerous if you do not master the codes;
- Finally, beyond the ring road, when you pass the 2000ᵉ rank (less than a million dollars in capitalization) you arrive… in the countryside. It is beautiful, picturesque, calm. But, if you’re an action fan, the time will probably feel a bit long.
Let’s stop this comparison there to focus on the fact that there is still a whole little world beyond these circles, made up of more than 10,000 other cryptocurrency assets. Even if the term “active” has rarely been so badly worn.
20,000 corners under the sea
In fact, we are entering the crypto ecosystem court of miracles, even in its cemetery of the elephants. There coexist the projects of Decentralized Finance poorly designed, malformed tokens, unfit to survive in real market conditions, but also the too many “scams”, only created with the aim of siphoning off the funds of the most beginners. There also vegetate the myriad of well thought-out projects and initiatives, simply guilty of amateurism, or of being released at the wrong time, or advised by the wrong people.
In short, the depths of marketcap are a herbarium where everything that has not worked in the industry is slowly gathering dust.
Ah, funny detail: from the 3,917th place, even Coingecko stopped counting (note however that the platform made the effort to check up to the 18ᵉ decimal after the comma the possible last small trace of capitalization of VersoView and LixirFinance).
What lessons can be learned from this brief enumeration? To grow and prosper a crypto asset needs deep roots (a project, a relevance, a team, etc.) a market in which to grow and develop and finally, by way of water and sunshine, access to regular, good-quality liquidity.
Apparently simple, this synthesis is ultimately complicated to achieve, especially when trust is scarce and money even more so.
In the end, the observation is as heartbreaking as it is without appeal: even with a broad and tolerant conception of what is supposed to be a “good” crypto project or a “promising” cryptocurrency, between 95 and 99% of the currently existing assets are doomed to stay – or join – the great dump of lost illusions. A few winners, over 20,000 losers, you just have to choose carefully.
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