From yesterday? – „Old“ cryptocurrencies are worth 90% less than at their peak
Many altcoins are currently significantly weaker than at their peak, but can this be seen as a move away from old to new crypto projects?
New data from crypto market research firm Messari shows that 83% of all cryptocurrencies that recorded their previous record high by January 2018 are still 90% behind that best.
The corresponding data was prepared by Matt Casto, an analyst at CMT Digital, who shows the average „return on investment“ (ROI) for the Bitcoin Method cryptocurrencies under consideration since the year of their record highs.
Holding assets that hit high marks +3 years ago is proving to be a massive lost opportunity cost for deploying capital.
There’s a reason 83% of assets that hit a high price in January 2018 are trading +90% below their ATHs.
ATH/Cycle Low data is from @MessariCrypto API pic.twitter.com/Kfzfq69ZMp
– Matt Casto (@mcasto_) January 21, 2021
The dataset includes 410 cryptocurrencies that had their record high in 2017 or later. Among them, those that recorded their „all-time high“ (ATH) in 2018 fared the worst, falling 90.71%.
Cryptocurrencies with an ATH in 2017 have since crashed 82%, while cryptos with a record high in 2019 have lost 72% year to date. Coins with bests in 2020 are still the best off, down „only“ 53%.
Messari’s data supports the much-touted „great revaluation“ thesis, in which capital flows from „zombie blackchains“, i.e. old blockchain projects that have little life left, into emerging crypto projects from the Decentralised Financial Services (DeFi) sector.
Some crypto investors are even using this thesis as a trading strategy
For example, the trader under the pseudonym Wangarian says he buys „cryptocurrencies that directly add value as DeFi“, while selling „cryptocurrencies from Layer-1 blockchains that do not add value“.
Casto himself also sees it as a „massive opportunity cost“ for investors to still hold their funds in these old cryptocurrencies. In his opinion, „there is a reason“ why they are lagging behind their best days.
Although many altcoins „from yesterday“ are weakening compared to their record highs, some of them have nonetheless made significant gains since then.
For example, several „alternative cryptocurrencies“ rebounded strongly after the „Black Thursday“ crash in March 2020. Since then, Cardano (ADA) has gained almost 1,700%, Zilliqa (ZIL) has risen by 2,670% and Decred (DCR) has even improved by a whopping 14,130%.