Crypto Christmas Present?
If you purchased Bitcoin as a Christmas present for yourself in December 2017, you would lose half your value if you sold today.
But compared to some altcoins, that is actually pretty good. Some coins have dropped by over 90 percent. No surprises here, but Bitconnect leads the losers charts, having dropped by over 99 percent.
Cryptocurrency Price Change (in USD) Since December 2017 for Top Cryptocurrencies
Source: Coinmarketcap.com - Uses Historical Data
So What if Crypto Has Fallen From All Time Highs?
Well obviously a 50 percent drop in Bitcoin value isn't ideal.
While the above chart is accurate, it is a bit deceptive, in that it doesn't show the extraordinary increase in value over the (slightly) longer-term.
You probably know this, but it is worth a reminder. Here is the year to date chart for Bitcoin. Yes the value in USD has dropped from all time highs, but it has increased from about $2,500 to $6,500 in the space of a year. A great outcome in anyone's book.
Bitcoin Price Change Year to Date from June 2016 to June 2017
Source: Coinmarketcap.com
Where to Next?
It's important to keep things in perspective. While we would all like cryptocurrency to keep increasing and never dropping, it is not surprising that a still relatively small market goes through swings and roundabouts. This is especially true when you have an unregulated market that allows people to lose money through pyramid or ponzi schemes like Bitconnect.
Which Coins Can Buck the Downtrend?
Interestingly (or perhaps not surprisingly) the coin that has bucked the trend is the one with a clear use case and value proposition.
Binance continues to be the largest exchange. It's fuel - Binance Coin - has increased by over 100 percent when everything else was tanking. Binance burns 10 percent of tokens periodically, uses tokens to reduce trading fees and for voting on new coins to be listed.
I think this is where the lesson is for the market. If you're interested in altcoins, looking at the practical use case is one way to make sure you invest in the next Binance instead of the next Bitconnect. If you can see how the coin will increase in value in a sustainable way, then you're more likely to have picked a winner even when the broader market is falling.
I'll post an update on cryptocurrency price changes like the above this Christmas. Lets see how the market compares in December 2018 to those December 2017 all time highs!