The investor has invested a hundred dollars in the top 10 cryptocurrencies in the beginning of the year. What happened?

Despite the extremely high rates of Bitcoin in 2019, the cryptocurrency as an asset class was in marked decline. Of course, some altcoins like Litecoin still managed to grow by hundreds of percent. However, total market capitalization of crypto-currencies headed for a decline. Fell even such major alternative cryptocurrency, like the Ethereum and XRP.

What does this mean? At least that those who adhered to the strategy of diversification, in fact, was at a loss. It’s especially funny on the background of how one of the users of social-news site Reddit decided to conduct a viral experiment with cryptocurrencies. And many others followed his example.

Graph of Bitcoin exchange rate 2013. Source: CoinMarketCap

Experiment with investment in ten cryptocurrencies

If you follow the theme of cryptocurrency on Reddit, then surely you eyes came across nick Joe-M-4. Over the past few years he has undertaken a range of experiments, trying to identify the maximally efficient strategy of diversification in the cryptocurrency market.

Captainvalor. Source: 2Биткоина

As a rule, the essence of the experiments is very simple: you take $ 100 and invest proportionally in each cryptocurrency in the top ten by market capitalization. First Bitcoin, then Ethereum in XRP and so on. Joe himself described his strategy as "Scriptindex lazy".

Last year’s experiment with investing in altcoins ended in failure: for the twelve months 1000 dollars turned in 1017, that is, capital has grown by as much as 1.7 percent. Of course, the sale of savings at the end of June 2019, when the Bitcoin has exceeded 13 thousand dollars — would result in much greater profit. But the author of the experiment decided to be honest to the end.

Besides, it seems that 2020 will be more successful. For example, according to the latest data, only in January investment has brought 55 percent. Thus $ 1,000 in bitcoin has turned into a 1550 dollars. During the same period, the total capitalization of the stock market grew by 36 percent.

Market capitalization of crypto-currencies in 2020. Source: CoinMarketCap

Despite the positive dynamics at the beginning of the year 2020, experts believe that in the coming years, alternative cryptocurrencies will survive the difficulties. Known cryptanalytic account, Ceteris Paribus on Twitter recently noted that the launch of cryptocurrency options exchange CME can be bearish for altcoins.

Although it is not so obvious, but the more such products on the market, the worse it is for most violas.


Recall that an option is an agreement under which a buyer obtains the right but not the obligation to buy or sell a certain asset. To do this it needs on a pre-specified price at a future point in time or during a selected time interval. Options are a type of derivative financial instruments or derivatives.

Cryptocurrency Sparta. Source: 2Биткоина

According to analysts, 99 percent of scriptaction are quasiproton product of Bitcoin. This means that the actual launch of regulated derivatives of Bitcoin can quite naturally lead to the leakage amounts from the market of altcoins.

Read on: 99% altcoins will disappear in five years, but two coins remain. Forecast expert.

The current General Director of “cryptomancer Bank” Galaxy Digital and a former Goldman Sachs partner Mike Novogratz also shared their concerns about investing in altcoins. As he States, the Ethereum “like many other cryptocurrencies” is still trying to gain the trust of the masses, but in fact acts more as a “venture investment”.

This is due to the fact that this cryptocurrency is now unable to have a lasting effect on investment and the world at large. Thus the best choice for investors in the stock market remains a leading Bitcoin.

Galaxy Digital Founder Mike Novogratz. Source: Bitcoinist


Experiment enthusiast proves the most important rule in the world of cryptocurrencies: the variability of courses, the coins would how to get rich investors and leave them with little or no income. In this niche you need to carefully monitor the market and make responsible decisions. In fact, as we have said before, selling in the middle of summer 2019, would earn a lot more.

Yes, 2020 has brought good profit, especially given the interest for deposits in banks. But again, nobody knows what will happen to the market next.

We believe that we cannot do without the classic advice: invest in cryptocurrencies only the money that you are willing to lose. Or at least without which can live for a long time. Bitcoin and Ethereum became the most lucrative assets of the decade, but it had to wait.

And while I do not recommend you to repeat the experiment user of Reddit. Blind attachment to the most popular crypto currencies without any analysis or personal attachment to the coin could end badly. Again, all investment decisions should be made independently.

Relevant courses coins are in our class ranking cryptocurrencies, and in our cryptodata wise investors will be able to get quality advice.

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