Tales of woe are easy to come by in the current market, in which most altcoins are faring multiples worse than bitcoin. Investors that have avoided the following projects, however, can draw some solace.
This Year’s Underperforming CoinsHave Fared Worse Than You Think
It’s easy to find underperforming altcoins from the past 10 months of largely bearish market action. Echelons easier, in fact, than finding the handful that have weathered the storm and have appreciated in value or, at the very least, have outperformed bitcoin. Taking a magnifying glass to 2018’s altcoin dunces makes for a productive exercise; not to revel in the misfortune of others, but for educational purposes.
“I bought the ‘dip’ a dozen times this year,” one Redditor complained recently. “Went down after each time.” Another remarked: “I’ve lost 95 percent of 25k and have been buying all the way down.”
The “hodl” meme that prospered in 2017, helping traders through “China bans bitcoin” FUD and other negative news cycles, has largely been abandoned now that hodling has been proven to be a disastrous strategy for anyone heavily invested in altcoins. The BTFD (Buy the F– Dip) meme has also waned, as traders have learned that in many cases the dip is often merely a precursor to a series of even lower dips.
Lesson 1: There’s a Big Difference Between a 90% and a 95% Loss
Wanchain (WAN), one of the more established cryptocurrency projects, is down 90 percent from its all-time high (ATH). The helpful break-even multiple column provided by Onchainfx shows that WAN would need to do a 10x to reach its previous ATH. Icon (ICX) is down 95 percent in comparison. On paper, it may sound like ICX has fared only marginally worse than WAN, and yet it would take a 20x multiple for icon to reach its former peak of $12.04 per token.
Lesson 2: Don’t Trust the Market Cap of Forked Coins
Market cap, or the number of coins in circulation multiplied by price per coin, is a notoriously crude yardstick, but it’s particularly bad when it comes to forks. Coins like bitcoin private and bitcoin diamond have market caps calculated by the number of BTC holders who could technically claim the forks. But in reality, the vast majority of bitcoiners have no interest in these minority forks and will never bother to obtain them, making their true circulating supply and market cap significantly lower.
Bitcoin atom (BTA), for example, has a market cap of $4.67 million. Its 24-hour volume is less than $15,000, however, and BTA is down 99.98 percent for the year to date, according to Coincodex. Another coin with a supposedly high market cap, ignis, is down 99.66 percent this year according to Blockmodo, despite technically having a cap of $30 million.
Lesson 3: There’s No Such Thing as a Price Floor
Just because an altcoin is down more than 90 percent doesn’t mean the road to (partial) recovery is in sight. Many traders racked up huge losses this year — not from buying at the top, but from buying at what they believed to be the bottom. As one trader confessed:
I bought bitclave (CAT) on exchange at ICO price thinking wow a shitcoin finally at ICO … then it went -99% on me.
As one can see in Telegram channels that share the collective salt of crypto investors, everyone’s portfolio is underwater this year. It’s just that some have shipped water at a much faster rate than others. In the case of leading cryptocurrencies such as bitcoin core, bitcoin cash and ethereum, the vast majority of investors didn’t purchase these assets at their ATH. Anyone who held BTC or BCH a year ago, for instance, would still be up on their investment by around 30 percent.
The markets aren’t nearly as gloomy as crypto’s worst critics would suggest — except in the case of traders who got carried away and diversified into risky altcoins and ICO tokens during peak mania. “I had a dream of making so much I could retire. I thought it was a once in a lifetime opportunity to make tons of cash and I was worried about missing out so I took a huge risk,” one investor recently confessed. “Life has humbled me. I’m an idiot.”