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Cryptos: Thou Shalt Not Go By Fad Alone!

crypto nov24 lt

Global cryptocurrency market cap has slowly edged up to $2.58 trillion from the seven-day low of $2.44 trillion. The overnight surge in market cap is close to 1.5 percent.
Bitcoin is trading at $56,600.71, at an overnight gain of 0.45 percent. Ethereum is at $4,294.57, after gaining 3.50 percent in the past 24-hours.

Gaming, Play to Earn and Metaverse categories have recorded market cap growth of more than 10 percent. Other major categories making noteworthy strides are Privacy (9%), Scaling (9%), Entertainment (9%), NFTs and Collectibles (8%), Sharing Economy (8%), Content Creation (7%), Video (7%) and Media (5%).

Despite the overall recovery, the meme category comprising 259 cryptocurrencies is now witnessing a 4.5 percent decline in market capitalization. More than 95 percent of the $52 billion market cap of the category is attributed to Dogecoin (DOGE) and SHIBA INU (SHIB). DOGE has recorded overnight losses of 4 percent whereas SHIB is down more than 6 percent in a day. SHIB which dropped to an overall ranking of 13 is currently trading 55 percent below its all-time high touched in late October.

Internet of Things category recorded 35 percent surge in market capitalization in the backdrop of a 2646000 percent overnight rally in 202nd ranked token Parkgene (GENE). According to its whitepaper, PARKGENE, is a decentralized ecosystem where parking owners and drivers meet to conclude short-term or long-term parking rental contracts. PARKGENE, based on the Ethereum Blockchain combined with smart contracts, aims to eliminate the dependence on centralized systems between the transaction participants. This would significantly reduce the cost of parking for drivers, while offering an alternative source of income to parking owners.

Meanwhile, 12th ranked Crypto.com Coin (CRO) touched a fresh all-time-high of $0.9436 a few hours ago. CRO has gained 18 percent overnight and 91 percent in the past week.
38th ranked metaverse token The Sandbox (SAND) also touched a fresh all-time high of $7.24 a few hours ago. SAND has gained 20 percent overnight and 94 percent in the past week.

54th ranked ZCASH (ZEC) has also gained 29 percent overnight and 61 percent in the week.

60th ranked Gala (GALA) is the best performer in the week with a surge of 155 percent.

The ECB's Governing Council has approved a new oversight framework for electronic payments (PISA framework) that will also cover crypto-asset-related services, such as the acceptance of crypto assets by merchants within a card payment scheme and the option to send, receive or pay with crypto assets via an electronic wallet.

Blockchain payments company Ripple has announced a partnership with the Republic of Palau to help the Pacific Island nation develop its own digital currency.

With crypto valuations surging sharply faster than other asset classes and the whipsawing trend becoming a regular feature, there is a felt need to learn from past trends. It would do well to assess how various cryptos have over time, emerged, excelled and thereafter either remained at the top spot or faded into oblivion.

Cryptocurrencies have been here for almost a decade. Also new cryptos are being added at an amazing pace. Meme and fad driven cryptocurrencies are commanding valuations at par with other cryptocurrencies that have clear cut use cases.

Will the fad fade?

Or will the frenzy feed further valuations?

Which cryptos dominated the market in the past several years?

Are the dominant cryptos of yesteryears still in the limelight?

To get a perspective on how the cryptocurrencies have behaved over time, we did some digging into historical snapshots and noticed the following.

As on April 28, 2013, there were around 7 cryptocurrencies. Of these, Bitcoin (BTC) and Litecoin (LTC) are in the top league still. Of the remaining 5, one is unranked, whereas the remaining cryptocurrencies are now ranked at 784, 802,1969 and 2094 positions in terms of market capitalization.

Of the 36 coins available exactly eight years ago, i.e. as on 24 November 2013, only three cryptos viz Bitcoin, XRP and Litecoin are still in the top-15. Of the remaining 33 coins, 15 are now unranked, 2 have fallen to rankings between 501 and 1000, 4 have slipped to rankings between 1000 and 1500, 5 have skidded to rankings between 1500 and 2000, 6 have dived to rankings between 2000 and 2500 and one is ranked more than 5000.

By 23, November 2014, the number of cryptocurrencies increased to 527. Four of the top-10 cryptos as on that date, viz Bitcoin (BTC), XRP (XRP), Litecoin (LTC) and Dogecoin (DOGE) have retained rankings within the top-15 even now. Dash (DASH) has slipped from rank 10 to rank 73. The remaining 5 are now ranked at 331st, 393rd, 706th, 784th and 1014th positions.

The top-5 cryptos among the 564 cryptocurrencies as on 22, November 2015, viz Bitcoin (BTC), XRP (XRP), Litecoin (LTC), Ethereum (ETH) and Dogecoin (DOGE) are still enjoying rankings within 15. Dash (DASH) has slipped from rank 6 to 73. Stellar (XLM) has fallen from rank 7 to 26. The next 3 have slipped to rankings of 393, 784 and 1014.

By November 25, 2018, the number of cryptocurrencies had crossed 2000. Six of the top-10 cryptocurrencies as on that date viz Bitcoin (BTC), XRP (XRP), Ethereum (ETH), Litecoin (LTC), Tether (USDT) and Cardano (ADA) are still reckoned in the top-15 category. The remaining 4 have slipped, but are still among the top-50 cryptocurrencies.

The dynamic rankings picture underscores the fact that the surge in some of the top-ranked cryptos were later found to be transitory. Only a small portion of the top-ranked digital assets have delivered consistent performance.

What is needed is the tenacity to see through the frenzy and spot genuinely worthy investment propositions based on technical due diligence and appropriate market intelligence.

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