Who can outperform Bitcoin? Analysis and summary of the exchange rate trends of 350 altcoins against BTC.

Uncovering the Top Performers A Comprehensive Study of 350 Altcoin Exchange Rate Trends Compared to Bitcoin's Dominance

Background

Recently, the market capitalization of BTC has reached a two-year high, which has prompted us to analyze the exchange rate of altcoins to BTC. First, let’s look at the historical price trends of some major coins against BTC.

Below are some charts from TradingView showing the exchange rate of popular coins against BTC over the past few years.

• LTC/BTC

• BCH/BTC

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• ADA/BTC

• ETH/BTC

From the above charts, we can see that even the best-performing token like ETH only reached its all-time high against BTC in 2017, about 2 years after its launch, and has not surpassed that high since.

Therefore, we have decided to expand the analysis and study the historical exchange rate changes between all altcoins and BTC.

Method

1. Select the top 500 coins by market capitalization from CoinMarketCap
2. Retrieve the weekly price data for these tokens from gate.io (gate.io has the longest historical price data for most tokens)
3. Find the highest exchange rate of each token to BTC and its corresponding date
4. Calculate the duration from the start of trading to the date of the highest BTC exchange rate
5. Calculate the duration from the lowest BTC exchange rate to the current date
6. Calculate today’s exchange rate as a percentage of the all-time high
7. This method is open-source on GitHub (link provided at the end of the article)
8. No complex statistics are involved. In the future, we can incorporate more statistical models for analysis.

Findings

Range of tokens included in the statistics

Some of the top 500 tokens are not traded on Gate.io, and we have also excluded tokens with a trading time of less than 1 year. In the end, we analyzed around 350 tokens, covering the majority of mainstream tokens.

Indicators

1. Exclude tokens with a trading time of less than 1 year
2. Calculate the exchange rate using the highest weekly price of altcoins compared to Bitcoin

When does the historical highest price (All-Time-High, ATH) of altcoins against BTC usually occur?

• The Y-axis represents the time span (in years) it took for the altcoin to reach its all-time high (ATH) price since its issuance.
• The X-axis represents the number of years the altcoin has been trading.

From the chart, we can observe the distribution of ATH time.

1. Most altcoins reach their ATH against BTC within the first year of trading.
2. There are very few altcoins that reach their ATH after 2 years.
3. Let’s have a better look with a pie chart.

Chart: Distribution of ATH since trading started

From the above chart, we can observe:

1. Only 5.5% of altcoins reached their ATH against BTC after 2 years of their release, the remaining altcoins reached ATH within 2 years of trading.
2. To get better insights, we need to filter out altcoins with trading time less than 2 years.
3. After removing altcoins with trading time less than 2 years, we are left with approximately 289 altcoins.

Chart: Distribution of ATH since start date, excluding altcoins traded for more than 2 years

The results didn’t change much, only 6.6% of altcoins reached their ATH against BTC after two years.

Let’s take a closer look at these altcoins: ['BNB','DOGE','ETC','FIL','FRAX','FTM','GT','LEO','LINK','MANA','MATIC','OKB','ONE','TFUEL','THETA','TON','TUSD','VET','WAVES']

Out of these 19 altcoins, some might have been mistakenly included due to listing delays on Gate. The average trading length is 4.82 years, i.e., January 9, 2019, when BTC was trading at around $3500, which was the bottom of the previous bear market.

When does the All-Time-Low (ATL) usually occur for altcoins?

In the previous section, we analyzed when altcoins reach their highest exchange rate. Now, let’s explore when altcoins usually hit their lowest exchange rate.

Indicators

1. Exclude altcoins with trading time less than 1 year.
2. Use the weekly low values of altcoins and Bitcoin to calculate the exchange rate.

This chart is more interesting. The chart shows that the altcoin/btc exchange rate ATL is almost linearly related to the trading time, meaning that the longer the trading time, the higher the probability that the exchange rate will be at ATL. Let’s find out more information through the pie chart!

Since ATL is more meaningful for tokens with a trading time of more than 4 years, we only include tokens with a trading time of more than 4 years.

Chart: Distribution of ATL for tokens with a trading time of more than 4 years starting from the current date

Therefore, only 18.4% of tokens with a trading time of more than 4 years did not reach the lowest point in the BTC exchange rate in the last cycle. Let’s take a closer look at these tokens:

They are ['ADA','DASH','DOGE','ETH','GT','KNC','LINK','LTC','MANA','MKR','SNT','THETA','TRX','VET']. These tokens indicate that they did not perform worse in terms of BTC exchange rate compared to the previous cycle. If we exclude the two special old tokens ETH and LTC, the average trading length of the remaining tokens is 5.77 years, which was at 2018-01-25, the end of the previous bear market, and the time difference between the issuance date and ATL is approximately 0.35, which puts their ATL at around 2018-06-05.

Conclusion

1. Among the 350 tokens we analyzed, only 19 tokens set a new all-time high price against BTC in the previous cycle:
   1. They are: ['BNB','DOGE','ETC','FIL','FRAX','FTM','GT','LEO','LINK','MANA','MATIC','OKB','ONE','TFUEL','THETA','TON','TUSD','VET','WAVES']
   2. They were listed around March 2019, which was the bottom of the previous bear market
2. In the previous cycle, only 14 out of 350 tokens did not create a new ATL against BTC:
   1. They are: ['ADA','DASH','DOGE','ETH','GT','KNC','LINK','LTC','MANA','MKR','SNT','THETA','TRX','VET']
   2. They were launched at the end of the previous bull market and reached their all-time low price approximately 4 months later, which was the start of the previous bear market
   3. The only overlap is ['DOGE', 'GT', 'LINK', 'MANA', 'THETA', 'VET']
   4. Therefore, buying at the bottom is very risky and is unlikely to bring the highest returns
3. Avoid buying secondary market tokens listed during the previous bull market as much as possible!
   1. Most of them will continue to create all-time low prices
   2. Some tokens will see their BTC exchange rate reach an all-time low within a few months, and then rebound in the next cycle. But these rebounds are not significant
4. Only tokens launched during a major bear market can create new ATH against BTC, not even ETH
5. Try to sell all tokens within 2 years after listing and gradually convert them into BTC during the bear market, because only 6% of tokens can create a new ATH against the BTC exchange rate in the next cycle, meaning they are stronger than the previous cycle!

Ref

https://github.com/Astrapolis-peasant/ath_btc_exchange_rates/blob/main/price_analysis_gate.ipynb

Translation:
Ref
Link: https://github.com/Astrapolis-peasant/ath_btc_exchange_rates/blob/main/price_analysis_gate.ipynb

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