Top cryptocurrency risers and fallers in January
By Dan Atkinson
12:40, 29 January 2020
How time flies. Hardly have the Christmas decorations been cleared away than it is nearly the end of January. Before too long, Easter eggs will be on sale.
So this is a good moment to grade the cryptocurrency winners and losers during the first month of the year.
On the face of it, all brands of cyber-cash, with one exception, enjoyed success during January, with none of them recording a fall. Does that mean everyone's a winner
Roaring back into favour
Not at all. Winning is relative, and some have won more convincingly than others.
To sort the wheat from the chaff, we have figured out the percentage gains seen during the month by each of the major cryptocurrencies. Some of the results surprised us. They may surprise you too.
Top of the tree are what we call the 30 per cent Club, comprising those currencies that have risen by at least that amount. Bottom of the table is a currency whose value went precisely nowhere during the month, followed by three cryptocurrencies whose value has crept up in the teens. In the middle are some respectable performances that, in other circumstances, could have been considered outstanding.
But these are exceptional circumstances. Cryptocurrency has come roaring back into favour after the horrors of 2018 when amid talk of tougher regulation and suggestions of fraud, cyber-cash seemed on the way out.
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Famous coin is laggard
So, who is in the 30 per cent club? Let’s start with EOS, which clocked up a 36 per cent rise from $2.63 on January 1 to $3.58 currently.
Next comes Litecoin, which showed a 33 per cent rise, from $41.49 on January 1 to $55.09 currently. Stellar and Cardano are in joint third place. Stellar rose 30 per cent from $0.0453 on January 1 to $0.0588, while Cardano rose by the same percentage from $0.0336 on January 1 to $0.0436.
Below our 30 per cent club we encounter Ethereum, up 25 per cent from $130.27 on January 1 to $162.66, followed by two coins both showing 24 per cent price rises, Steem, from $0.1288 on December 31, and TRON, from $0.0133 on January 1 to $0.0165.
Below this, we are into the teens. Quantum showed a 19 per cent rise from $1.60 on January 1, 2020, to $1.90, while NEO recorded an 18 per cent rise, from $8.95 on January 1 to $3.58.
Ripple, priced in sterling, rose 17 per cent from £0.1452 on January 1 to £0.17. More sluggish still was the appreciation of the most famous cryptocurrency in the world, Bitcoin. It rose just 16 per cent from $7,177.57 on January 1 to $8,354.48.
That said, it could have been a lot worse. EON went precisely nowhere, standing at $0.0006 on 1January 1 and is currently priced at $0.0006.
What can we learn from these movements? More to the point, perhaps, what are the lessons we ought not to take from them?
The first is that Bitcoin is a busted flush and is going, in the jargon, ex-growth. It is true that Bitcoin’s huge success makes it unlikely that it will spend a lot of time in the 30 per cent club.
But wat would you rather have – a 16 per cent increase in a currency valued at more than $8,000 or a 36 per cent increase in, for example, EOS, worth about $2.50? There are, of course, arguments on both sides, and adventurous traders and investors will tend to prefer the young gazelles to the big beasts, hopeful that the former will turn into the latter in due course, generating large returns for those who bought early.
Pointers for the future
However, there are two caveats here. One is that the high-flying younger cryptocurrencies are as likely to crash and burn as to soar to greater heights. Bigger potential rewards come with bigger potential risks.
The second is that, while percentage changes are useful in gauging a currency’s performance, cash values, the nominal price of the asset, matters too.
A more useful lesson to take away from all this is that it is possible to identify cryptocurrencies that combine high growth with a weighty cash value. Litecoin fits this bill.
But a second lesson teaches that the cryptocurrency market never stands still. Bitcoin’s position is probably, although not definitely, unassailable. The same cannot be said for many of its competitors.
It is a sobering, albeit useful, thought experiment to try to imagine which of the cryptocurrencies listed above may no longer be with us in 2021. Nor need this be based entirely on guesswork. If a brand of cyber-cash describes itself in vague terms, that may be a warning sign.
Similarly, if a cryptocurrency has been around for a while but has failed to achieve name recognition, that, too, could be a red flag.
Above all, ask yourself, if a particular cryptocurrency should disappear, would many people miss it? In the case of Bitcoin, obviously the answer is yes. No so much in the case of some others which have no competitive advantage and are doing nothing distinctive or original.
This is a fast-moving market and most of January 2020 is already slipping out of the rear-view mirror. But there are lessons in history and this snapshot of how different currencies performed during the early weeks of this year may contain valuable pointers for the future.
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