Let’s take a bird’s eye view of the cryptocurrency market.
According to incomplete statistics, there are 9,929 cryptocurrencies in the world, with a total market value of approximately $1.72 trillion. However, there are two points to note here.
First, the price of cryptocurrencies fluctuates greatly, and their market value only has an order of magnitude significance, so people don’t need to pay too much attention to specific numbers. For example, at the peak on November 10, 2021, the total market value of cryptocurrencies once reached 3 trillion US dollars (see Figure 4-2), when the price of Bitcoin reached 68,519 US dollars and the price of Ethereum reached 4,852 US dollars. However, as the price fell, the total market value of cryptocurrencies fell by more than half. Second, although there are many cryptocurrencies, the vast majority of them have almost no value and no trading volume. Only a very small number of cryptocurrencies are actively traded and are worth a lot of money.
Figure 4-2 Total market value of cryptocurrencies
Data source: Statista (https://www.statista.com/).
This head effect of the value of cryptocurrency is actually not difficult to understand. Anyone who knows a little about programming can easily issue cryptocurrency by modifying the Bitcoin code. Technically, this is not difficult to do. Now there are many platforms that provide such services, and cryptocurrency can be issued by uploading code, which makes it easier to issue cryptocurrency. The difficulty is not the technology, but to make others recognize the currency you created and be willing to spend money to buy it. The more people recognize it, the more valuable the currency you issue will be. Recall that when Bitcoin was first born, no one cared about it for a long time, and it was not until a long time later that it received attention. Table 4-2 counts the top 30 cryptocurrencies by market value. The largest market value is Bitcoin, followed by Ethereum, and the smallest is Liquidcoin. The total market value of these 30 cryptocurrencies is about 1.5 trillion US dollars. A careful look at Table 4-2 can draw several interesting conclusions.
First, there is a hidden "two super and many strong" situation in the cryptocurrency world. Bitcoin and Ethereum are competing for supremacy, ranking first and second, while other currencies are a little far from being "two super".
Figure 4 – Number of 3 cryptocurrencies
Data source: Statista (https://www.statista.com/), data from coing
ecko（https://www.coingecko.com/）。
Second, in the “double super and multiple strong” pattern, the top is “double super”, and the following multiple strong are mainly concentrated in stablecoins and initial tokens. Therefore, it can be subdivided into “double super” + stablecoin + initial token” three-way split. In the following subdivision introduction, in addition to Bitcoin and Ethereum, we will focus on stablecoins and initial tokens.
Third, the concentration of market capitalization is very high. Among them, Bitcoin, Ethereum, and Tether, which rank the top three in market capitalization, account for 39.6%, 18.7%, and 6.9% respectively. Looking carefully at Table 4-2, you will find that the concentration of cryptocurrencies is very high. The total market capitalization of the top three accounts for 65.2%, the top 10 accounts for 82.4%, the top 20 accounts for 88.5%, and the top 30 accounts for 91.5%. In a sense, understanding these 30 cryptocurrencies means understanding the overall picture of cryptocurrencies.
Table 4-2 Top 30 cryptocurrencies by total market capitalization
Data source: CoinMarketCap (https://interest.coinmarketcap.com).
Fourth, in the competitive crypto world, Bitcoin still firmly holds the top spot. In Table 4-2, the total market value of Bitcoin is $385.3 billion, accounting for about 40% of the total market value of cryptocurrencies. In contrast, Ethereum, which is known as blockchain 2.0, an upgraded version of Bitcoin, has a total market value of less than half of Bitcoin. In fact, Ethereum's second-place position is not stable, and it was once surpassed by Ripple in 2017. In contrast, Bitcoin's position as the top spot has always been stable.
Fifth, the presence of forked coins is very low. Among the top 30 currencies, only 4 are forked coins. The revelation here is that although the original intention of forked coins is to improve Bitcoin, they do not seem to be widely accepted by the market. This reminds people of what Satoshi Nakamoto once said: "If you don't believe me or don't understand, I'm sorry, I don't have time to convince you." Satoshi Nakamoto has no time to convince, the market has already expressed its attitude with prices.
Sixth, many of the top cryptocurrencies are stablecoins and initial tokens. It seems that these two types of cryptocurrencies have strong vitality. Considering that initial tokens once caused a lot of confusion and had a bad reputation, their prosperity is particularly interesting. At present, many countries have accepted stablecoins and initial tokens and brought them under regulation. Table 4-2 gives an overall picture of the crypto world. Look at this table carefully and for a long enough time, you will have such a feeling: this world is still dangerous and it is difficult for us to judge its prospects. But in any case, we can no longer ignore this world.
