We analyzed the top 300 cryptos by market cap and were shocked by the results.
Cryptocurrency has dominated the headlines this year, whether it’s because of the scams, the astronomical returns, or the fears of what impact it might have on the financial system. More and more Americans now own crypto, and every week brings another story of increased adoption.
We used CoinMarketCap data to analyze the performance of the top 300 cryptocurrencies by market cap. Some of the results were astonishing.
85% of top altcoins have doubled in value
Out of the top 300 cryptos, 67 launched this year, so we don’t yet have full data for them. A further 11 are stablecoins which are pegged to other commodities such as gold or the U.S. dollar.
Even after the recent crypto price crash, a whopping 188 of those 222 remaining cryptos have doubled in value. That’s 85%. And many have produced even bigger gains:
What seems even more astonishing at first glance is that only six of those 222 cryptos lost value.
Crypto prices can go down as well as up
Looking at the figures above, it’s easy to get the impression that cryptocurrencies are an easy way to make money. Unfortunately, investing is never quite that simple.
When we look at the top 300 coins by market capitalization, by definition, we’re looking at the winners. The coins that didn’t produce such good results will have fallen out of the top 300 — or never made it onto the list. To illustrate this, we checked how many of the top 300 cryptos by market cap at the start of the year are still on the list today.
A total of 136 cryptocurrencies that ranked in the top 300 at the start of the year have fallen off of the list. Or, to put it another way, only 164 cryptos managed to keep their top 300 position.
In addition, because this is a volatile and speculative market, timing is also important. If you’d bought during this year’s peaks of April and early November, there’s no guarantee those cryptos will ever recover in value.
There’s no such thing as a totally risk-free investment, especially in cryptocurrency.
There’s a lot of uncertainty in the crypto market
Cryptocurrencystyle=”text-decoration: underline”> investment went from strength to strength in 2021, but that does not necessarily mean we’ll see similar growth in 2022. Some analysts believe this is only the beginning, while others warn the crypto bubble could burst at any time.
This is a relatively new and unregulated market with a lot of unknowns. We don’t know what impact increased regulation might have, nor do we know which individual cryptos might fall victim to hacks or suffer technical glitches.
If 2022 follows the same pattern as 2021, we can guess that almost half the cryptocurrencies in today’s top 300 chart could fall behind. This can be challenging for buy-and-hold investors who are looking for cryptos with strong long-term potential.
If you’re hoping to invest in a coin that will double in value next year, it is important to weigh the risks and rewards. To use crypto jargon, some cryptocurrencies could go to the moon. Unfortunately, there are also plenty of cryptocurrency scams or poorly thought through projects that have very little chance of success.
The more you understand about the industry and each coin, the better. With 15,000 coins out there, it still takes patience, research, and a bit of luck to pick the winners. Look into the coin’s management team, read its whitepaper, and investigate what sets it apart from its competitors.
Don’t invest more than you can afford to lose
The golden rule of crypto investing is to never invest money you may need — whether to meet your other financial goals or cover your day to day living costs. It’s tempting to go all in on crypto in the hope of more than doubling your investment, but you could also lose everything.
One way to minimize the risk is to use a reputable cryptocurrency exchange. Another is to research and then research some more. And another is to only invest money you can afford to lose. That way, if you do buy into a coin that fails, it will be disappointing, but it won’t be financially devastating.
