Why 99 percent of all cryptocurrency investments don’t deserve

There are several factors that make investing in the stock market profitable. Liquidity, that is, the property of the assets to be sold quickly at a price close to the market, is one of them. It is also significant for day-trading, i.e. transactions during the day, and for investments with a long-term perspective. As recent studies show, only a few cryptocurrencies have adequate liquidity.

Only 40 cryptocurrencies significant trading volume

When the cryptocurrency bubble began to swell in 2017, investors are encouraged to carefully examine withpaper, team members, concept development and technology, before contacting any cryptocurrency. Today the situation is very different, as almost all altcoins have fallen in price. And this is regardless of how experienced was the team or thought out was the concept of the project.

The massive landslide for the most part was provoked by the onslaught of the financial regulators in the sector ICO and rupture of the speculative bubble. He left alive only a few new projects.

With this in mind, in 2019, has formed a new set of criteria that determine the potential return on investment. And liquidity is now playing a very important role.

To asset you to trade effectively, he must have good daily volume. If cryptocurrency is not showing any activity, then its creators are not interested in the sale. Now on Coinmarketcap represented slightly less than 5,000 cryptocurrency, 99 percent of which are completely illiquid. This means that you will not be able to sell large amounts of coins without dropping her course. Because there are no buyers. So, to invest in such a project is meaningless — it is banal will end up costing them money.

Useful facts: What cryptocurrencies should be avoided.

Analyst kriptonyte Willie Wu presented some charts which show the projects with the greatest volume of trading and, in fact, dead altcoins. Here is what he wrote in his Twitter.

On Coinmarketcap submitted 4978 coins. On the chart you can see the Top 50 projects on trading volume. After 40 pips absent indicators of trade volume. That is, 4938 are illiquid.

The liquidity of the cryptocurrency. Source: Twitter

We checked the data of Willie and found a small inaccuracy. Currently on CoinMarketCap 4798 coins and not 4978. Accordingly, illiquid coin 4758, but not 4938. But the point remains the same.

Total cryptocurrency market. Source: CoinMarketCap

Many altcoins can safely be considered dead: they do not report any development or progress on the project. Others give the appearance of work, but no trading activity on these assets is not observed.

One of the main reasons for this situation analysts believe the cryptocurrency has not yet begun the season altcoins. However, this version is questionable: in a niche enough alternative cryptocurrency that was once among the ten largest by market capitalization, and has now gone into oblivion.

Read on: Buying altcoins — worse than Russian roulette. And here's why.

At the same time as said General Director of Shapeshift and early Bitcoin investor Erik Voorhees, “three years ago most of these projects didn’t even exist.” While on Coinmarketcap was presented only 652 cryptocurrencies. That is, the number of projects rose by 660 percent. In addition, at least 6 once the top projects as of November 2016 has now fallen to the bottom of the ranking.

Kings on liquidity

Returning to the subject of liquidity, the obvious leader in trading volume is stablein Tether. The second and third positions moved Bitcoin and Ethereum to. The three leaders inferior to Litecoin. It should be noted, though lately, Litecoin has repeatedly tried to write off, the cryptocurrency has existed for 8 years. During this time thousands of projects have emerged and faded.

Logo Tether. Source: Bitcoinist

Also in the top ten in trading volume includes EOS, BCH, XRP, Tron, NEO and ETC.


Overall, not so difficult to identify projects in which to invest. It is important to look at the combination of factors of liquidity and availability of market demand for the asset. Also, don't forget to pay attention to market capitalization and activity teams as part of the development of the project.

Cool example of activity of developers is Ethereum. Now users can use a clear address and even send coins via email. Learn more about the network enhancements read in this article.

The actual rate of the coins can be viewed in our class ranking cryptocurrencies, and in cryptodata traders there are many useful tips about investing in the cryptocurrency.

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