At present, the combined capitalization of the 2,022 crypto assets with a known market cap was roughly $222 billion.
On Nov. 19, 2017, just weeks before the current all-time highs would be set for the price and capitalization of Bitcoin and the crypto market overall, the 985 tokens with a known market cap represented a capitalization of around $244 billion — a similar zone to where the market is at currently.
However, with the capitalization of Bitcoin (BTC) having grown 15% from $134.1 billion to $154.6 billion during the 24 months following November 2017, more than twice as many altcoins are competing for an increasingly shrinking share of the combined crypto market cap when compared to the altcoin bubble of 2017.
Altcoins compete for diminishing market share
While 2019 has seen BTC produce an impressive recovery, the majority of altcoins have lost a significant market share when compared to 2017.
As of Nov. 17, 2018, the combined crypto capitalization was approximately $186 billion after having shrunk by 21.7% over 12 months. Since November 2017, the dominance of BTC had fallen from 56.5% to 52.6%, with altcoins gaining an overall 47.4% market share of crypto capitalization.
However, the number of tokens with a known capitalization had risen 75.8% to 1,732, increasing competition among altcoins for a shrinking pool of liquidity — with the combined capitalization of altcoins having dropped from $107.2 billion to $86.8 billion just 12 months later.
Despite the number of crypto assets having increased by a further 16.7% since November 2018, the combined altcoin capitalization reduced by roughly 8% to $80 billion during the past year. As such, altcoins have seen increased proliferation in the face of a declining pool of liquidity for two consecutive years.
Altcoin capitalization centralizes among top markets during 2019
Between November 2017 and November 2018, the relative market share of alternative cryptocurrencies became more pluralized, with the share of capitalization represented by altcoins sitting outside of the top 10 by market cap, increasing from 23.3% to 28.4% despite the dramatic rise in the number of markets.
The greater pluralism in the distribution of altcoin capitalization in 2018 can be largely attributed to a decline in the relative market share of Ether (ETH) and Bitcoin Cash (BCH) throughout the 12 months prior. Together, ETH and BCH had shed 23% of altcoins’ relative market share in one year.
Of the 10 largest altcoins by market cap on Nov. 18, 2017, only XRP’s market share increased throughout the next year, becoming the largest altcoin by capitalization and representing 22.8% of the combined altcoin market cap on Nov. 17, 2018.
While Litecoin (LTC) and Monero (XMR) both remained in the top 10 ranking of altcoins by market cap between November 2017 and November 2018, both tokens suffered losses in relative market share.
LTC fell by one rank, from fifth to fourth, shedding nearly a third of its relative market share in the process — from 3.7% during November 2017 to 2.8% one year later. XMR also fell one rank, from eighth to ninth, with its market share dropping from 1.9% to 1.7%.
Dash, NEO, Iota, Nem (XEM) and Ethereum Classic (ETC) all fell from the top 10 altcoins by capitalization as their relative market share declined in 2018. They did, however, retain their rank among the top 20.
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Dash fell from fifth, with an altcoin market share of 3.3%, to rank 12th with 1.3%; NEO fell from sixth with 2.5% to 15th with 0.9%; Iota fell from seventh with 2.3% to 11th with 1.3%; NEM moved from ninth with 1.8% to 14th with 0.9%; and ETC fell from 10th with 1.7% all the way to 16th place with 0.9%.
As of Nov. 17, 2018, the relative market share represented by the alternative cryptocurrencies ranked third to 10th by capitalization had increased from 17.2% to 19.9%, with XLM, EOS, Tether (USDT), Cardano (ADA) and Tron (TRX) having emerged among the top 10 altcoins by market cap.
In just 12 months, XLM rose from the 20th-ranked altcoin, representing a relative market share of 0.6%, to the fourth-largest alternative cryptocurrency, with 5.5% of total altcoin capitalization.
EOS also climbed, from 14th with 0.88% in 2017 to rank fifth with 4.7% in 2018, while Tether grew from 19th with 0.7% to place sixth with 2%, and ADA grew from 18th with 0.7% to seventh with 1.8%, while TRX produced the most dramatic growth, climbing from the position of 53rd-largest altcoin with a relative market share of 0.1% to rank tenth with 1.4%.
Altcoin capital centralizes during 2019
During 2019, altcoin capitalization has significantly centralized among the top alternative currencies by market cap. Currently, the 2,011 alternative cryptocurrencies that do not rank among the top 10 by market cap are competing for just 20.61% of the total combined capitalization.
In 12 months, ETH has restored its ranking as the largest altcoin by market cap and increased its market share by a quarter, currently representing 25.1% of the total altcoin market capitalization.
XRP now ranks as the second-largest alternative cryptocurrency by market cap following a 39% drop in relative market share, which currently sits at 14.2%. Despite BCH seeing another 12-month decline in altcoin market share, the token retained its distinctive position as the third-largest alternative cryptocurrency by market cap, with BCH now representing 6% of altcoin capitalization.
As such, the relative dominance of the three largest altcoins has increased 7% year-on-year from 51.7% to 55.4%.
Top 10 altcoins gain market share
The market share of altcoins represented by the tokens ranking from third to 10th by capitalization also increased for the second consecutive year, currently representing 24% of the combined altcoin market cap.
The relative market share of Tether increased by 160% between November 2018 and November 2019, with USDT ranking as the fourth-largest alternative cryptocurrency and comprising 5.2% of all altcoin value.
LTC also saw a significant gain in market share, with LTC currently ranking as the fifth-largest alternative cryptocurrency by market cap after its relative market share increased by 66% to 4.7%.
The sixth-largest altcoin by capitalization, Binance Coin (BNB), has risen from the 13th-ranked altcoin due to a 230% gain in market share and currently represents 3.9% of altcoin value. The seventh-ranked altcoin, Bitcoin SV (BSV), also constitutes a new entrant among the top 10 altcoins, representing 2.79%.
TRX saw an 11.4% gain in relative altcoin dominance, currently ranking as the 10th-largest alternative crypto asset, with a market share of 1.6%.
Altcoin trade volume grows steadily
Despite the increasing centralization of altcoin capitalization among the top markets over recent years, many alternative cryptocurrencies have seen a significant increase in trade activity.
On Nov. 18, 2017, the 10 most-traded cryptocurrencies reportedly generated $7.1 billion worth of trade during 24 hours. BTC, BCH and ETH amassed a combined 24-hour volume exceeding $1 billion, while eight tokens including USDT, NEO, LTC, XRP and ETC also produced a daily volume greater than $100 million. Overall, 23 crypto assets posted eight-figure volumes or higher.
Despite the brutal bear trend of 2018, the combined daily volume reported by the 10-most traded tokens had increased 66.8% by Nov. 17, 2018. Only three of 2017’s 10-most traded tokens saw a decline in volume, with BCH, Dash and Iota seeing a dip in trade activity. During the period, 14 cryptocurrencies each garnered a 24-hour trade volume exceeding $100 million, and 36 other assets boasted a volume of more than $10 million.
This time around, the 10-most traded cryptocurrencies produce $56.8 billion in daily volume — an increase totaling 381% year-on-year and 700% over the last 24 months.
None of 2018’s most popular tokens have posted a reduction in trade volume, despite BSV and TRX replacing ZEC and NEO among the top ten. USDT, BTC, ETH, LTC, BCH, EOS and XRP posted 24-hour volumes exceeding $1 billion, while 33 other tokens reported more than $100 million in daily trade and nearly 150 tokens continuously producing more than $10 billion worth of trades.