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Cryptocurrencies have become a large part of the investment world. Bitcoin and many other coins are traded throughout the world — even in countries like India where the government has turned a skeptical eye toward them.
Here are five striking stats providing evidence of the meteoric trajectory of cryptocurrencies:
1. Over 1,000 Cryptocurrencies Have Failed
Bitcoin may be the most widely known cryptocurrency currently trading, but it’s far from the only one. In fact, as cryptocurrency tracker Coinopsy reports, at least 1,085 other cryptocurrencies have launched and failed in the same time that Bitcoin has seen its rise.
Despite this, however, some 3,000 active cryptocurrencies still exist, at least for the moment. As cryptocurrency CEO Brad Garlinghouse of Ripple told Dash News, many of these are expected to fail as well.
Proposed reasons for the massive failure rate of cryptocurrencies abound and include theories about the entrance of big finance into the crypto industry, projected financial security in the near and mid-term future, and the massive evidence of the volatility of cryptocurrencies.
2. The Second-Most Expensive Cryptocurrency Is Bitcoin
Bitcoin is widely considered to be the most expensive cryptocurrency in the world, and at many times in its history, it has been. But according to statistics site Statista, as of October of 2020, Bitcoin slipped to second place on the list of most expensive cryptocurrencies in the world, valued at $10,917. Taking Bitcoin’s place as the most costly virtual currency globally as of this writing is Yearn.Finance (YFI), trading at more than $40,000 at one point early this year.
Cryptocurrency prices are highly volatile, and these values can change minute-by-minute. As there is no underlying commodity linked to cryptocurrencies and no governing body guaranteeing them, the only criterion determining the value of any cryptocurrency is the price that buyers and traders of it agree upon.
3. In 2019, $11.5 Billion in Cryptocurrency Transactions Were Linked to Criminal Activity
According to the Chainalysis 2020 Crypto Crime Report, 35% of millennials in America and 18% of Americans in general bought cryptocurrency in 2019. Of that activity, approximately 1.1% of it was associated with criminal activity. The report’s writers attribute the partially-anonymous and relatively decentralized nature of cryptocurrencies with contributing to this tendency.
Here is a breakdown of the specific criminal activities most-frequently linked to cryptocurrency transactions in that year:
- Child abuse material
- Darknet markets
- Financing terrorism
- Stolen funds.
By far the most common of these crimes involving cryptocurrencies were scams. They were responsible for over $4 billion in cryptocurrency taken from victims.
Of this amount, the vast bulk, accounting for nearly half of all criminal activity linked to cryptocurrencies in that year, involved just two Ponzi schemes.
4. Financial Experts Describe Bitcoin as the New Gold
According to the paper “Is Bitcoin the New Digital Gold? Evidence From Extreme Price Movements in Financial Markets” recently released by the Department of Economics of the University of Pretoria, traders increasingly consider Bitcoin a “safe-haven” asset, not unlike gold, the Swiss Franc, and US treasuries. Specifically, traders are using Bitcoin as a hedge against global uncertainties, such as international trade wars.
Using a complex statistical framework known as the multivariate extreme value theory, the paper’s authors modeled the “tail dependence structure of the return distribution.” In doing so, they made a pair of discoveries:
- Confirmed previous study results that stock market booms and crashes inversely correlate with extreme cryptocurrency returns.
- Showed that Bitcoin serves well as a hedge during turbulent periods.
5. Bitcoin Controls Over 60% of the Cryptocurrency Market
Bitcoin reigns supreme among cryptocurrencies, with no serious comers for its throne. The site CoinMarketCap charts the market capitalizations of the various global cryptocurrencies from its relative birth in 2013 through to today.
On April 28 of that year, when the charting begins, Bitcoin accounted for nearly 95% of all cryptocurrency in the marketplace. It dropped to a low of 1/3 of the crypto market in 2018 before rising back to reclaim most of its status, ranging between approximately 55% and nearly 70% of the crypto market since then.
In a distant second place is Ethereum, with between approximately 7% and 13% of the cryptocurrency market over the course of 2020.
As of this writing, there are approximately 18.5 million Bitcoins in circulating supply and almost 1 trillion BitTorrent crypto coins alone.
With proliferation like that, the only statistic left to find, it seems, is how long it will take before cryptocurrencies overtake standard currencies in common circulation.