A plethora of crypto assets on the market
In spite of a dip in the closing weeks of 2021, it has been a good year for cryptocurrencies. Not only did most crypto assets experience astronomical vertical growth — surging valuations and user numbers — but the market grew horizontally as well.
According to Finance in Bold, the number of crypto assets on the market double from 8,000 on January 1, 2021, to over 16,000 on the first day of the new year. The financial magazine conducted informal online research with a web archive tool to check the number of crypto assets listed on CoinmarketCap, one of the most popular crypto price trackers.
While the numbers may not be totally accurate, the trend is crystal clear: crypto is booming. On average, over 20 new currencies are being introduced to the market per day. The last time we covered this topic was in August 2021, and over 11,000 coins were live at the time of writing. That equates to almost 50% growth in the number of crypto assets in the last four months alone. Mind you that this was during highly volatile market conditions as well.
Winner(s) take them all
However, the crypto market is also very top-heavy, just like many other markets. Over 70% of the entire crypto market capitalisation was controlled by three coins in October 2021 — a figure that has hardly changed since. While there technically is a lot of variety in where investors can put their money, in practice, most of the coins on the market are really the proverbial shitcoins or vapourware. These micro cap tokens often have little to no intrinsic value since they have little to no business model behind the token; their creators are simply riding the hype train as long as it’s still going.
Will this trend continue in 2022?
So, will the market see another 100% increase in crypto assets in the next year?
That is anyone’s guess, but judging by the growth in crypto assets in recent months, you’d be a brave man to bet against it. Even though the price of Bitcoin has corrected over 30% since its all-time high in early November, the number of crypto assets on the market has expanded. Crypto remains an attractive market to get involved in, particularly considering the promising long-term prospects of the technology.
On top of that, usage of cryptocurrencies is growing despite falling prices. More than 10,000 Bitcoin ATMs are now up in the US. Expect that number to grow as well. More investor money continues to flow into the market, too. Avalanche announced that it plans to attract developers with a $280 million AUD fund.
With those kinds of incentives, it will be hard for both genuine builders and scam artists to stay on the sidelines. It seems only a matter of time when cryptocurrency number 20,000 is launched.
