While 2018 was a sluggish year for cryptocurrency that tanked the prices to yearly lows, it did bolster the overall Market Cap with around 12% which translates to USD 15 billion. The reason for this bolster, according to the latest research from Diar, was newly minted coins and crypto inflation.
New Supply of Token in 2018 Was Equivalent to Total Crypto Market Cap Of 2017
The latest research put forward by Diar interestingly covers the impact of new supply of coin and the crypto inflation on total cryptocurrency market cap. According to the report despite having a sluggish 2018, markets still stand nearly ten times the value they did at the start of 2017. The report further states that the advent of 2019 has bought in an equivalent of $15Bn in additional value from cryptocurrency inflation and new tokens versus the start of 2018.
The major share of this addition has come from leading coins such as Bitcoin, Ethereum and the recent event of Bitcoin Cash forking that added over $5Bn for the trio on cryptocurrency markets.
Another notable con that has added to this total is that of stablecoins. The sudden rise in demand of stablecoin in the second half of 2018 that lead to the release of multiple stablecoins and increases in the supply of dollar-pegged cryptocurrencies during the year accounted for an additional $1.2Bn at the start of 2019.
The remaining major contribution came in was from supply increases for cryptocurrencies that existed amounted to nearly $4.2Bn at current prices.
And overall, markets saw an average 35% inflation rate for the year in coin supply increases.
Another interesting fact put by the report was that
“2018 accounted for almost the whole market valuation that stood at the start of 2017 with no standout application success story as of yet apart from cryptocurrencies whose sole purpose is to transfer value.”
700 new crypto tokens added to the market
The report also stated that even though the market was melting throughout 2018, it did not stop the projects to add newer tokens to the market. 2018 saw over 700 cryptocurrencies added to market – more than existed at the start of 2017 – a 50% increase at the start of 2019 vs 2018.
The report also points out an unusual behavior of crypto traders. It states that cryptocurrency traders have appreciated in new tokens that did not exist at the start of the bear market – coins that, for all intents and purposes, remain to be no more than additional noise in an overcrowded decentralized promise-land.
The report touches upon interesting economic perspectives, but what stands out is the compared to 2017 the market is still fairly up today signifying that long-term investing and #BUIDL are the keys to success.
What is your take on these new coin additions and how many of them would survive? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.