The crypto world has faced a series of challenges in 2018. Bitcoin has recently reached its yearly minimum, and nearly all altcoins have been experiencing a dramatic decrease in price. As of early December 2018, the cryptocurrency market is all red and even the most optimistic experts aren’t sure about the future of decentralized money. Some of them say that it’s time to burst the crypto bubble, while others claim that bulls will change the game soon.
While enthusiasts and analysts are debating what will happen next year, regular investors and traders are wondering how to save money and earn more. It’s clear that Bitcoin won’t disappear any time soon, because it’s the most trusted cryptocurrency with the largest group of supporters. In this article, we want to provide a guide to the best alternative projects, which stand a good chance to survive during the bear market.
Bulls vs Bears
First of all, let’s take a look at the current market state and compare it with the previous bear market in order to understand what’s happening.
Last time we saw the cryptocurrency market stagnating in 2014-2015. According to CoinMarketCap, the market lost around 75% of its value within one year! The 2014/2015 fall was caused by a number of factors – the notorious Mt.Gox crash, speculative trading, and regulatory clampdowns. All this led to investors losing trust in cryptocurrencies, and thus selling off their assets.
The 2018 crisis seems to follow a similar scenario. In January 2018, the cryptocurrency market broke into the big time with almost every token hitting its all-time high. After Bitcoin had reached the $20,000 mark, it was proclaimed “the best-performing asset of the decade”, outpacing other currencies, stocks, and precious metals. However, when you deal with something as volatile as cryptocurrency, you should always be prepared for the worst. The reverse trend came quickly. Upon concerns over tighter regulation and rumors of the Bitcoin price manipulation, the cryptocurrency market was pushed into recession. A massive sell-off started. Since then nearly $300 billion has been wiped off of the total market cap.
When comparing the crypto charts in the aftermath of two crises, the list of survivors has radically changed from 2015 – only seven currencies have remained in the top-20. While Litecoin, Dogecoin, Stellar Lumens, Dash, and Monero have seen a bit of reshuffling, Bitcoin and XRP have remained the world’s leading cryptocurrencies.
Still, the market is highly unpredictable – new altcoins pop up on a daily basis and the industry leaders replace each other before you know it. Analyzing the previous market movements, we have defined the basic features that can help altcoins survive by 2020.
There are four main criteria, which distinguish successful projects:
- The product. The coin should have a clear practical value. It’s important that the project has a proven concept and a ready-to-use infrastructure.
- The community. The more supporters the project has, the more likely it will survive in the future.
- The team. To keep up with the industry trends the coin should be powered by a robust technology.This is why a team of forward thinkers is a must for each cryptocurrency project.
- The level of adoption. This is still the most significant mark of the coin’s success. If the number of merchants willing to accept this coin as payment grows, then it would be the right choice to invest in it. If the cryptocurrency offers something different from financial services and is widely implemented by businesses, then it stands a good chance for blooming.
It is only natural that the top-rated altcoins are here to stay for a while. We would certainly mention Ethereum because it’s equal to Bitcoin in terms of its importance for the community. As the most advanced smart contract platform, Ethereum is already used by many big-name companies like Microsoft, Hyperledger, and Intel.
Another top currency – XRP – is a go-to solution for banks when it comes to making cross-border transactions. Just like Ethereum, it has a large network of partners and is unlikely to fade away soon.
Further on, we want to focus on less famous but highly promising projects.
Ethereum Classic (ETC)
As the name suggests, Ethereum Classic has diverged from Ethereum. Ethereum Classic is also powered by smart contracts and allows developers to create dApps on top of the platform. This project has two great advantages over its rivals like EOS or Cardano that are called ‘Ethereum killers’:
- Proof-of-Work algorithm. The ETC community sticks to the cryptocurrency origins and supports the idea of PoW mining. This approach makes it possible for any user to participate in the mining process, and thus keep the network as decentralized as possible. Since Ethereum is about to switch to a different protocol soon, there will certainly be enough miners who will prefer Ethereum Classic in this case.
- Support by Coinbase. The world’s most famous beginner-friendly exchange has added ETC recently. For users, this is a sure sign that the project can be trusted and is worth investing in.
- Partnership with UTRUST. It has recently been announced that Ethereum Classic will be added to UTRUST’s payment platform. This integration will make ETC more accessible and promote its wider adoption among merchants.
If you want to diversify the portfolio when prices are low, ETC would be a good alternative to ETH.
Here’s one of the best hybrids of XRP and Ethereum. On the one hand, Stellar focuses on international payments with transactions time about 5 seconds and tiny fees of nearly $0.0000001. On the other hand, the project allows launching ICOs, decentralized exchanges, and stablecoins on its base. Purchasing XLM is a solid investment option for a few reasons:
- The partnership with IBM on its “World Wire” payment processor seems to be profitable.
- It is a good alternative to existing transfer systems like Western Union.
- It allows sending and receiving money without banks.
- The project is going to launch the Lightning Network for even faster transactions.
- Coinbase plans to list XLM.
The increasing governmental control over cryptocurrencies forces people to seek projects focused on privacy. Zcash is a successful altcoin, which allows anonymous transactions without exposing identities of senders and receivers. Its zk-SNARK technology acts as a benchmark for privacy protocols and is actively implemented by other crypto projects.
This currency is actively used in the DarkNet and is likely to survive. As for the reasons to invest in ZEC, its constant improvements show that the project is on its way to wider acceptance. It also may be interesting that WikiLeaks accepts ZEC donations.
To sum up
As the tendencies of the crypto market show, most of the top projects will remain in the list in 2020. Ethereum Classic, Stellar, and Zcash are some of the promising coins that are not yet widely supported. To define which altcoins are worth investing in, do some extra research and understand what practical value a crypto of your choice offers.
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