Analysis Of The Top-20 Cryptocurrencies By Market Cap
Why The Crypto Market Cap Indexes Are Useless
Coinmarketcap is one of the “crypto-websites” newcomers would immediately discover back in 2017.
Coingecko back then was a bad replica of Coinmarketcap, but sometime in 2019, it evolved into a practical alternative.
Today we find plenty of similar websites tracking prices and other crypto-related data, yet these two prevail.
Still, the top 10, top 20, and top 100 lists of these indexes offer nothing else but a deception.
Stablecoins serve nothing to the investor, meme coins are present to discredit communities that work to meet global adoption, and various VC-pumped clones are currently deflating after devs and the funds that pumped them pocketed the profit.
This article contains my opinion on why the top 20 (or top 100) of these indexes don’t present any realistic ranking of cryptocurrencies.
16 out of 20 from the top 20 don't belong there.
The Top-20 Cryptocurrencies At CoinMarketCap
On their first page, these indexes usually cover the top 100 cryptocurrencies ranked by market cap.
However, even the top 10 change often, and occasionally even scam coins reach there.
We have seen how Bitconnect achieved a top-10 position in 2017 with a market cap of two billion dollars.
At its height, BitConnect’s market cap was $2.5 billion, with estimates varying as to how much its founders gained when it shut down soon afterwards.
In 2022, Terra Luna from the top 10 crashed to zero after the scheme collapsed.
There's a long list of coins or tokens which made it close to the top 10 since the early days, but today are completely forgotten and abandoned. Currently, stablecoins, exchange coins, and centralized ETH clones dominate the top positions. That's where the money has gone.
Analysis of the top-20 Cryptocurrencies by Market Cap
What we have is:
4 stablecoins (USDT, USDC, BUSD, DAI)
The top 20 of crypto contain already four stablecoins that distort the indexes.
Indexes (Coinmarketcap, Coingecko, etc) should remove these coins from the lists since it serves no purpose to the investor. Their price will either be 1 or 0. We can determine their market cap any time we want. Stablecoins in this list are a disturbance.
6 Ethereum clones (MATIC, DOT, SOL, TRX, AVAX, Cardano)
Various centralized and VC-backed ETH clones utilize tokens featured in the top 20. Most of them will not make it but will begin a slow decline and disappear from the top. The support they received from funds and crypto exchanges (Binance, Coinbase, Kraken, OKEx) will deteriorate with time as VCs always take profit. In crypto, VCs dump the tokens and they never recover, thus developers should seek better fundamentals than Solana.
Out of these seven tokens, only one or two will survive and still be relevant in the following years. The rest are already on their way to the bottom. Maybe those that plan to decentralize their procedures will stay relevant.
1 Wrapped Token (WBTC)
WBTC, an Ethereum-wrapped version of BTC, is featured among the top 20 cryptocurrencies. However, the amount of wrapped BTC is not deducted from the BTC market cap, meaning we get it counted twice. WBTC is irrelevant in this list and an error to include with a market cap counted already for BTC.
2 Meme Tokens (Doge, SHIB)
Dogecoin, which Musk still supports humiliating the crypto space, and Shiba Inu a pointless token with no use case.
3 Exchange Tokens (BNB, UNI, LEO)
The Uniswap exchange rules the UNI token, with its price relating to the usage of the exchange.
BNB started as a pointless exchange token, which is not really required as top exchanges like Coinbase, Kraken, and Bitstamp never had one. However BNB evolved as native token of the Binance Chain, a centralized PoS version of Ethereum.
However, a vapor exchange token like Unus SED LEO, which was launched by Bitfinex supposedly to cover the exchange customers from a hack in 2015, is also featured in the top 20. The Tether ties helped this useless token reach there with the sole purpose of messing up the indexes further.
16 tokens distort the top-20 with their presence.
This is also the answer to why Bitcoin Cash, Monero, ZCash, or Dash are not in higher positions today. The market will wash away the insignificant coins and custodians in the field that damaged the true cryptocurrencies that work towards adoption as money.
Fund managers promoted shady custodians and useless tokens to funds, so we learn how pension funds lost money in this “industry” by following the uneducated advice of supposed specialists.
Research is not what the mainstream in crypto suggests. It is not about speculation, but about investing in innovation and progress.
Investigating the 2013 coins market cap as an example, we find that only 4 coins are still there, with most of the rest not even in the top 500 today.
Ethereum clones dominate the market caps today, but most will fall into obscurity just as most of these Bitcoin clones did.
In Conclusion
Investors are manipulated even by these rankings presenting extreme valuations and tend to regard tokens value without considering the irregularities in this market.
Most of the top 100 cryptocurrencies will not be around five or ten years later.
The Ponzi mechanics that sustained most of the Ethereum clones, the stablecoins rise into 100 Billion tokens supposedly pegged to the USD, and the dogecoins and exchange tokens demonstrate an inconsistent market.
Binance, and Tether also constitute detrimental weaknesses for crypto. They will eventually elapse, and only then we may be able to talk again about a free market.
Lead Image on Pixabay
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No Financial advice. Do your own research and analysis.
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Hello Pantera! Good article as always. I see you are writing regularly now, 1 post a day minimum. That's great and I also plan to write more often, both about crypto and other topics.
One small correction: 6 Ethereum clones (MATIC, DOT, SOL, TRX, AVAX, Cardano)
Polkadot, Tron, Solana, Cardano are not Ethereum clones, that's completely different blockchains. And actually, they are Proof-of-Stake blockchains even before Ethereum moved to PoS On Cardano, Polkadot and Solana there are many projects, so they deserve to be in top-20)