It’s been about four months since the cryptocurrency market hit its peak, at an astonishing $835.68B. Bitcoin was trading at almost $20,000 – $19,888.90 to be exact. Since the bear run commenced, almost every crypto, big or smaller, has suffered big losses. At the time of this writing, the cryptocurrency market sits at less than half its cap from all-time-high days. Most cryptocurrency supporters, enthusiasts, investors and so-called experts estimate that the market will recover. And when it does, it will reach new highs, breaking any previous record.
During bull runs, one of the hottest topic for anyone in the crypto world and anyone looking to earn some profits, short or long-term, is to find the next new coin that will multiply its value, the coin or coins that will moon. So what does really make coin moon?
Bitcoin is still profitable the last 12 months
Despite the bear market, anyone who entered the market a year ago and bought Bitcoin, still sees a 366.74% profit in his portfolio. That’s because, despite the bear run (some call it a crash) which smashed Bitcoin’s price at half, Bitcoin, as well as most other large market cap coins are still sitting at a price way higher than what they used to a year ago.
Alts vs Bitcoin
2018 is considered by many industry experts ‘The Year of the Alts’. As a matter of fact, altcoins, even high market cap ones like Ethereum and Litecoin are way more profitable than Bitcoin over the last 12 months. This comparison between Bitcoin, Ethereum and Litecoin clearly shows that Bitcoin has been the least profitable investment for someone who entered the market 12 months ago. The potential for profits against Bitcoin becomes even more transparent when comparing Bitcoin to coins which significantly increased their position in the market over the last year. EOS and Cardano are two vivid examples as shown in this comparison. EOS saw a price increase of 925% during the last year while Cardano grew at a whooping 1160% rate.
Finding the alt that will moon
For many investors and experts, especially during bull-runs, finding the next altcoin that will skyrocket has been the main focus. With Bitcoin arguably being the flagship which leads the way but is also much slower with movements, many investors have been trying to find the coin that for some reason will significantly perform Bitcoin, in other words, increase its value multiple times more than what will Bitcoin will (hopefully) do. So how does one determine which altcoin will be the next one to moon? There are several factors that are believed to play a role. Some of them are:
- Value Proposition. In other words, what problem is the specific cryptocurrency project trying to solve? How important is this problem and how big is the opportunity that the proposed blockchain solution is trying to address?
- Team. Its size, experience preferably in the cryptocurrency space, its past achievements
- Competition. Are there other coins or projects going after the same market segment?
- Business Development/Marketing. For some coins, especially the B2B ones, this translates simply into partnerships. For other projects, this correlates to the (potential) adoption or how well the team can communicate their value proposition to the end user.
Since many coins still don’t have production-ready products or don’t plan to do so in the near future, this is closely tied to their value proposition, how well can they execute on what they promise in their whitepaper.
When the market grows as a whole, the price of most altcoins against FIAT currencies grows, too. However, there are a few factors that seemingly can cause the price of a coin to spike against both Bitcoin and FIAT currencies. A commonly mentioned factor and the one we examine here is the Big Exchange Listing.
Many investors talk about ‘The Binance Effect’, which is the instant influx of trading volume and the rapid price increase a coin experience the moment it gets listed in a big exchange such as Binance. Even just the announcement that a big exchange will list a coin can cause its price to spike. Let’s examine the case of 5 coins that were recently added on Binance and try to determine if and how much their price against Bitcoin spiked:
Golem was listed on Binance on April the 27th. By comparing Golem’s price against Bitcoin for the first few days after the listing, it becomes apparent that the listing caused GNT’s price to jump. A week after the listing Golem had grown 51% while Bitcoin only 5%.
In another example, CloakCoin’s listing on Binance took place on April the 17th. The comparison between the two coins shows CLOAK gaining much ground against Bitcoin during the first days. The first week after the listing CloakCoin was up 28% while Bitcoin was up 20%.
GRS started trading on Binance on the 4th of April. After about 10 days of no specific movement against Bitcoin, Groestlcoin’s price spiked against Bitcoin. One month after the Binance listing Groestlcoin was up 112%. Bitcoin was up 30% during the same time period.
SysCoin is yet another coin that was recently added on Binance, on March 28th. In a similar pattern like GRS, SysCoin didn’t gain much against Bitcoin during the first few days. In fact, 10 days after the listing, SysCoin had lost 16% of its value while Bitcoin was down 15%, performing just slightly better. However, 30 days after the listing SYS was up 77% when BTC is saw a 14% increase.
QLC Chain – a.k.a. QLink (QLC)
QLC was added on Binance on April 26. The price spike against Bitcoin took place immediately. During the first three days, QLC was up 87%. Bitcoin was losing 6% at the same time. 30 days after the listing QLC was enjoying gains of 82% when Bitcoin was gaining a mere 5%.