Abstract : The new breakthroughs and upgrade of the public blockchain technology will drive the integration of the blockchain and actual application scenarios to truly improve productivity and reform the relations of production for application scenarios with real commercial value.
DD Think Tank, an analysis team under ChainDD spent two months carrying out in-depth tracking and analysis of the cryptocurrency market and its performance, finalizing 2018-2019 Cryptocurrency Market Annual Report: Reset the starting point of value. DD Think Tank team collected, processed and analyzed more than 100,000 pieces of data of the global cryptocurrency industry and integrated more than 900 digital currency governance policies from 224 countries and regions (as defined by Baidu Baike), covering dozens of vertical segments. Furthermore, the team performed a weighted index calculation with a selection of 12 mainstream coin trading pairs at head exchanges, using the composite DD index to reflect the conditions, trend and fluctuations of the whole market.
This annual report is the most intuitive 2018 annual industry report for cryptocurrency investors and practitioners worldwide and provides reliable data and trend guidelines for the development during the next stage.
In 2018, the global digital currency market experienced sharp ups and downs and the overall cryptocurrency market value was concentrated towards mainstream coins. DD Think Tank summed up the CoinMarketCap data and found that by January 9, 2019, the market value of the global cryptocurrency market reached 137.2 billion USD, among which, the top 30 digital currencies had a total market value of 121.4 billion USD, accounting for 92.43% of the total market value. In comparison, in January 2018, the market value of the global cryptocurrency market was 823.8 billion USD, among which, the top 30 digital currencies had a total market value of 741.3 billion USD, accounting for 89.98% of the total market value.
- In 2018, the overall cryptocurrency market plunged and the annual decline was 87.76%. Among all the cryptocurrencies, the market value of the top 30 digital currencies dropped 83.62%. Judging form the annual market condition, the shrink rate of the market value of the top 30 digital currencies was slower than that of the overall cryptocurrency market.
- Overall, the top 30 digital currencies in terms of market values performed steadily with frequent ranking changes. Among them, BTC's dominant position was stable and further consolidated. The market value of ripple coin surpassed that of Ethereum twice. The market position of the top 30 digital currencies remained dominant.
- Rankings of the market values of head digital currencies maintained stable and mainstream coins changed frequently.
- Cryptocurrencies in the Public chain domain had the highest market share. Market share of forked coins, basic currencies and cryptocurrencies in the financial domain remained stable. Anonymous coins' market share decreased and stablecoins joined the market, whose market share increased to 10% in the second half of the year.
1. In 2018, the global cryptocurrency market value shrank by 87.76%
In 2018, the global cryptocurrency market value dropped sharply with an annual drop of 87.76%. Among them, the decrease of the market value of the top 30 digital currencies was 83.62%. Judging form the annual market condition, the shrinkage of the market value of the top 30 digital currencies was slightly lower than that of the total cryptocurrency market.
2. Overall, the top 30 digital currencies in terms of market values performed steadily with frequent ranking changes.
a. Bitcoin’s dominant position remained firm and its market share increased during the bear market.
According to the statistics by DD Think Tank, the market dominance of BTC was in negative correlation with the total market value of the overall digital currency market. During the bull market in February, May and June 2018, the proportion of BTC's market value out of the total market value of the overall digital currency market fluctuated between 34-38%. During the bear market between November and December, the proportion of BTC's market value out of the total market value of the overall digital currency market reached its annual peak at 53%.
DD Think Tank believes that even though the overall market fell, BTC, as the standard coin in the cryptocurrency market, enjoyed a firm dominant position and its position was even further consolidated during the bear market. At the same time, BTC was still the digital currency with the highest level of recognition in the digital currency market.
b. Market value of Ripple coin surpassed Ethereum twice.
DD Think Tank summed up the data by CoinMarketCap and found that in January and November 2018, the Ripple coin surpassed Ethereum twice and was ranked number two among all digital currencies. DD Think Tank believes that there are two reasons why the Ripple coin surpassed Ethereum in 2018:
- BCH fork led to the plunge of the overall digital currency market. On November 16, BCH forked, causing the overall digital market to plummet. Starting from the beginning of November, BTC first fell under 6,000 USD threshold and then further to 3,000 USD, which immediately triggered the crash of the whole cryptocurrency industry.
- Constant good news. The value of a cryptocurrency relies on its liquidity. The ripple coin, as a medium of cross-border payment enjoys high liquidity for application scenarios. ChainDD Express News has got the news from Koinalert that on November 10, Japan's MUFG and Brazil's Bradesco Bank started collaboration on cross-border payment between Japan and Brazil using Ripple xRapid and XRP technologies.
Under the backdrop of the sharp fall of the overall market, Ripple's constant good news helped the price of the Ripple coin stay stable while Ethereum's price fell under the influence of the market condition, causing Ripple's market value to surpass Ethereum's. At the end of 2018, the digital currency market experienced a period of “Indian Summer”, showing market recovery. Both the prices of Ethereum and BTC rose again. After January 2, the market value of Ethereum surpassed that of Ripple again and returned to the second position.
c. Top 30 digital currencies in terms of market values were dominant in the market
According to DD Think Tank's statistics, from January 2018 to January 2019, the market value of the top 30 digital currencies remained the dominant position in the market and continued to be consolidated.
3. The rankings of market values of head currencies remained stable and mainstream currencies changed frequently.
DD Think Tank's analysis concluded that the three digital currencies with the highest market values, namely, BTC, Ethereum and Ripple represent three types of digital currencies with relatively high levels of recognition. The first type is the base currency represented by BTC. The second type includes currencies developed using bottom layer public blockchain technology, represented by Ethereum. The third type includes application coins integrated with application scenario implementation, represented by Ripple. Except for head digital currencies, the rest of the top 30 digital currencies experienced sharp fluctuations and the detailed market ranking fluctuation is displayed below:
4. Most of the Top 30 Digital Currencies in terms of Market Values were in the Public Blockchain Domain.
DD Think Tank selected four time points between January 2018 and January 2019 and sorted the market values of the top 30 mainstream digital currencies and categorized them according to their domains. Among these domains, highest proportion of currencies were in the public blockchain domain throughout the four periods. The proportions of currencies in the domains of fork coins, base coins and finance were relatively stable. The proportion of currencies in the anonymous coin domain decreased while that in the stablecoin domain increased.
5. Future public blockchain development will enjoy continuous upgrade.
Although digital currencies with BTC as the representative entered a harsh market condition in 2018, there is still room for significant improvement in the future. During the period of bull market from 2017 to 2018, algorithms consensus and understanding of decentralization were improved in an explosive manner and large number of ICO projects. In the coming period of harsh market condition, the top 30 digital currencies in terms of market values will continue to occupy the dominant positions.
The development of the public blockchain is the mainstream application direction of the top 30 digital currencies. DD Think Tank discovered while analyzing the domains in which the top 30 digital currencies are applied in July 2018 that the highest increase of the top 30 mainstream digital currencies in terms of market values between January 2017 and July 2018 were in the public blockchain domain and the concentrated growth occurred in the second half of 2017 when the proportion of applications in the public blockchain domain increased from 10.34% to 40%.
However, this explosive and concentrated growth didn't bring fundamental technological changes. The problems such as low processing speed and frequent loopholes of smart contracts were not effectively solved in 2018. Technological development looked gloomier than expected. Slogans such as “million TPS”, “public blockchain 3.0” and “overtaking Ethereum” during the public blockchain battle at the beginning of 2018 completely disappeared at the end of the year.
Development of DApps and building of a blockchain ecosystem depend on a stable, efficient and secure bottom layer public blockchain platform. The new breakthroughs and upgrade of the public blockchain technology will drive the integration of the blockchain technology and actual application scenarios to truly improve productivity and reform the relations of production for application scenarios with real commercial value. 2019 will see a relatively stable market condition and the development of the bottom layer framework and public blockchain will continue to be upgraded.