Assessing the performance of a cryptocurrency involves more than just looking at its price chart. Here are some key criteria to consider:
Market Capitalization and Price Movement:
Market Cap: Reflects the total value of all outstanding tokens, highlighting size and dominance within the market.
Price Volatility: Tracks how much the price fluctuates, indicating risk and potential for quick gains or losses, especially over short periods of time.
Trading Volume: Shows the level of buying and selling activity, hinting at investor interest and liquidity.
Technical Analysis:
Chart Patterns: Identifying established technical patterns on price charts can offer insights into potential future price movements.
Indicators: Technical indicators like Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) can provide additional signals about momentum and potential overbought/oversold conditions.
Blockchain Network Metrics: Metrics like transaction volume, active addresses, and hash rate for Proof-of-Work blockchains can indicate network usage and health.
Project Fundamentals and Development:
Technology and Use Case: Analyze the underlying technology and the real-world problem the project aims to solve, assessing its potential for adoption and impact. If the cryptocurrency has real-world applications beyond speculation, it signals potential long-term value and sustainability.
Roadmap and Progress: Review the project's roadmap and its progress in achieving milestones, gauging its development activity and future direction.
Community and Adoption:
Social Media Engagement: Track the project's social media presence and community activity to gauge user interest and sentiment.
Partnerships and Integrations: Partnerships with established companies or integration with other blockchain ecosystems can enhance adoption and value.
Regulatory Landscape:
Regulatory Scrutiny: Consider the potential impact of existing or upcoming regulations on the project and its cryptocurrency.
Compliance: Assess the project's commitment to regulatory compliance to mitigate potential legal risks. Many crypto projects will elect to be publicly audited and transparently publish the results, choosing to become qualified or even over-qualified to build trust with their audience.
When considering an investment in any cryptocurrency, these factors should be examined just as much as any price action.
Crypto’s 2023 macro trends and numbers
The year 2023 was filled with major events in the cryptocurrency space that many decreed to be the start of a new bull-run, after a protracted bear market or “crypto winter” post-various market-wide crashes. Happily, bullish events will continue in 2024, but let’s look back at some highlights of last year before we look at the top-performing major coins.
Bitcoin Spot ETF approval speculation - throughout the year, the industry was affected by public comments, delayed approvals and FUD spread through official channels about the SEC’s possible approval of not just one but around a dozen Spot Bitcoin ETFs. They were indeed approved on a historic day in early Jan 2024, but in 2023, Bitcoin’s recovery rally is widely credited to this speculation.
Active wallets - Despite the price volatility of 2023, the number of active Bitcoin wallets maintained a surprisingly steady upward climb. Throughout the year, the estimated number of active wallets, those containing at least one Bitcoin transaction in the past 6 months, consistently increased. By December, this figure had surpassed 48 million, representing a significant jump from the 32 million active wallets counted at the beginning of the year.
Wallets holding more than 0.1 BTC - While the overall number of active Bitcoin wallets grew in 2023, the distribution of the cryptocurrency remained highly asymmetrical. As of December, only around 2.5 million wallets, roughly 5% of the total, held more than 0.1 BTC. These "whale" wallets, controlling a much larger share of the total supply, have the potential to significantly influence the market with their buy and sell orders.
Google Trends data - interest in Bitcoin in terms of search volume hit the peak, scoring a perfect 100/100 in early Jan of 2023, having built every month since September throughout 2023’s fourth quarter.
Now it’s time to look at some of the top-performing cryptocurrencies of 2023.
Top Cryptocurrencies of 2023
Solana (SOL): With a gain of 965%, Solana remained a top performer with its high transaction speeds and strong ecosystem of decentralized applications (dApps).
Avalanche (AVAX): This blockchain platform known for its fast and customizable transaction processing enjoyed a 266% increase in its market cap throughout the year.
Injective (INJ): This decentralized exchange protocol saw a remarkable 2923% gain, fueled by its innovative cross-chain trading capabilities and expanding DeFi offerings.
Bitcoin (BTC): The original cryptocurrency delivered a significant 155% return, showcasing renewed confidence in the market leader.
Ethereum (ETH): The dominant smart contract platform enjoyed a healthy 90% gain, benefitting from increased DeFi activity and the anticipation of the Ethereum 2.0 upgrade.
Cardano (ADA): This platform known for its energy-efficient Proof-of-Stake consensus mechanism saw a respectable 147% increase in its market cap.
Top Altcoins of 2023
Bonk (BONK): This Solana-based meme token, launched in December 2022, experienced a phenomenal 9600% increase in 2023, driven by hype and community support.
Cryptos to watch in 2024
Bitcoin - with the halving event coming up in April, coupled with new monetary inflows from the ETFs, it is expected that in the latter months of 2024, Bitcoin will perform very well.
Ethereum - outperformed Bitcoin briefly around the time of the ETF approval, suggesting it was something of a “buy the rumour sell the news” event. With Ethereum’s own ETFs still to come, who knows whether this will be bullish or not for the second-biggest crypto.
