//A brief history of the 2013-2015 crypto bear market, why “99% of alts die” is misleading, and what would’ve happened if you’d invested a week after the last crash

A brief history of the 2013-2015 crypto bear market, why “99% of alts die” is misleading, and what would’ve happened if you’d invested a week after the last crash

I’ve had several recent conversations on this sub that inspired me to do some analysis. This is the result.TL;DR: The last bear market lasted for 17 months, during which total cryptocurrency market capitalization fell by ~76% from its all-time high. If you’d invested $400 in BTC and $400 in the bottom 20 alt-coins (by market cap), then as of today’s date, your investments would be worth ~$11,564 (BTC) and ~$18,740 (alts)–a total of ~$30,304–despite the fact that 16 out of the bottom 20 alts disappeared in the intervening years. I believe the lesson here is to spread your alt-coin investments out.What Happened in the Last Bear Market?This section was inspired by /u/MisterKyles ‘s post.According to CoinMarketCap, during the earlier bull market, total crypto market capitalization peaked on November 30, 2013, at ~$15.2 billion. Thereafter, a long bear market began, during which total market cap bobbed up and down for over a year, hitting its first major low of ~$3.6 billion on January 16, 2015–a ~75% drop–and then going back up to as high as ~$4.7 billion in mid-March. Finally, on April 26, 2015, the market hit bottom at ~$3.5 billion–a ~76% drop.This year, total crypto market cap hit an all-time high of ~$828 billion on January 7, 2018. If the current bear market were to exactly mirror the 2013-2015 bear market (and it won’t, but this is still a good jumping-off point), then we would expect to see the market hit a low of ~$196 billion by mid-June 2019.As I write this, we’re currently at ~$260 billion (i.e., down ~68.5% from ATH), having hit a low of ~$248 billion in the past few weeks (i.e., down ~70% from ATH). This suggests that we may still have a significant distance to go–both in terms of time (i.e., another ~14 months) and market cap lost (i.e., ~25% of the current market cap)–before we see the bottom of the current market. I’m personally somewhat more bullish than that, as I think any correction will be over by the end of Q3 2018, but that’s what would happen if this crash were to exactly mirror the last one.What if You Invested Money Shortly After the Market Hit Bottom?This next section was inspired by a comment by /u/SlinkiesAreSpies , who wrote,99% of alt coins dieWe then proceeded to have a vigorous debate about it, during which I was referred to this market snapshot, from May 3, 2015–i.e., exactly one week after the market hit bottom in 2015.Of the top 20 coins by market capitalization, 17 are still around–that is, only three coins, or 15%, died.Of the bottom 20 coins (i.e., the coins ranked 522-542 on that day), 4 are still around–that is, of the worst coins from this arbitrary date, 80% are gone. That’s absolutely terrible, but it’s nowhere near 99%.So, let’s look at the prices of the four survivors from the bottom 20:Tigercoin (TGC; current rank: 1075): Up from $0.000125 to $0.005188–a 41x gain. Worth noting, however, that the trading volume was only $46 in the past 24 hours.Dotcoin (DOT; current rank: 542): Up from $0.000034 to $0.018939–a 557x gain. Volume was not terrible, at ~$24k in the past 24 hours.TrickyCoin (TRICK; current rank: 1555, apparently due to lack of data): Up from $0.000029 to $0.006463–a 222x gain. Worth noting that CoinMarketCap has very little info on this coin right now. As an aside, I’ll also add that the coin’s name doesn’t exactly inspire confidence…Coin(0) (CNO; current rank: 1061): Up from $0.000021 to $0.002807–a 133x gain. Worth noting, however, that volume was only $4 in the past 24 hours.So, would I buy any of the above coins today? Probably not. That said, however, let’s imagine the following experiment:Put $400 in BTC on May 3, 2015. BTC has increased 28.9x since then, so you’d have $11,564 as of today’s date.Put $20 in each of the bottom 20 coins on May 3, 2015. In this experiment, 16 of the coins that you purchased die, so you lose $320. However, the remaining $80, which is spread across the four coins that survived is worth $19,060. This means that your net profit is $18,740, which is $7,176, or 62% more than you would have made if you’d invested in Bitcoin.Finally, even assuming that you decide to count TGC, TRICK, and CNO as “dead” due to lack of trading volume/information, you’ve still made $11,140 from DOT alone–which is almost on-par with BTC.I think the lessons here are (1) although a majority of low-ranked alt-coins die, it’s nowhere near 99%; and (2) you should probably spread alt-coin investments out.I’m also considering running this as an experiment with the current 522-542-ranked coins, but I probably don’t have the cash right now. Feedback on this post is very much appreciated!Edits: Typos, fixed a link

I've had several recent conversations on this sub that inspired me to do some analysis. This is the result.

TL;DR: The last bear market lasted for 17 months, during which total cryptocurrency market capitalization fell by ~76% from its all-time high. If you'd invested $400 in BTC and $400 in the bottom 20 alt-coins (by market cap), then as of today's date, your investments would be worth ~$11,564 (BTC) and ~$18,740 (alts)–a total of ~$30,304–despite the fact that 16 out of the bottom 20 alts disappeared in the intervening years. I believe the lesson here is to spread your alt-coin investments out.

What Happened in the Last Bear Market?

This section was inspired by /u/MisterKyles 's post.

According to CoinMarketCap, during the earlier bull market, total crypto market capitalization peaked on November 30, 2013, at ~$15.2 billion. Thereafter, a long bear market began, during which total market cap bobbed up and down for over a year, hitting its first major low of ~$3.6 billion on January 16, 2015–a ~75% drop–and then going back up to as high as ~$4.7 billion in mid-March. Finally, on April 26, 2015, the market hit bottom at ~$3.5 billion–a ~76% drop.

This year, total crypto market cap hit an all-time high of ~$828 billion on January 7, 2018. If the current bear market were to exactly mirror the 2013-2015 bear market (and it won't, but this is still a good jumping-off point), then we would expect to see the market hit a low of ~$196 billion by mid-June 2019.

As I write this, we're currently at ~$260 billion (i.e., down ~68.5% from ATH), having hit a low of ~$248 billion in the past few weeks (i.e., down ~70% from ATH). This suggests that we may still have a significant distance to go–both in terms of time (i.e., another ~14 months) and market cap lost (i.e., ~25% of the current market cap)–before we see the bottom of the current market. I'm personally somewhat more bullish than that, as I think any correction will be over by the end of Q3 2018, but that's what would happen if this crash were to exactly mirror the last one.

What if You Invested Money Shortly After the Market Hit Bottom?

This next section was inspired by a comment by /u/SlinkiesAreSpies , who wrote,

99% of alt coins die

We then proceeded to have a vigorous debate about it, during which I was referred to this market snapshot, from May 3, 2015–i.e., exactly one week after the market hit bottom in 2015.

Of the top 20 coins by market capitalization, 17 are still around–that is, only three coins, or 15%, died.

Of the bottom 20 coins (i.e., the coins ranked 522-542 on that day), 4 are still around–that is, of the worst coins from this arbitrary date, 80% are gone. That's absolutely terrible, but it's nowhere near 99%.

So, let's look at the prices of the four survivors from the bottom 20:

  • Tigercoin (TGC; current rank: 1075): Up from $0.000125 to $0.005188–a 41x gain. Worth noting, however, that the trading volume was only $46 in the past 24 hours.

  • Dotcoin (DOT; current rank: 542): Up from $0.000034 to $0.018939–a 557x gain. Volume was not terrible, at ~$24k in the past 24 hours.

  • TrickyCoin (TRICK; current rank: 1555, apparently due to lack of data): Up from $0.000029 to $0.006463–a 222x gain. Worth noting that CoinMarketCap has very little info on this coin right now. As an aside, I'll also add that the coin's name doesn't exactly inspire confidence…

  • Coin(0) (CNO; current rank: 1061): Up from $0.000021 to $0.002807–a 133x gain. Worth noting, however, that volume was only $4 in the past 24 hours.

So, would I buy any of the above coins today? Probably not. That said, however, let's imagine the following experiment:

  1. Put $400 in BTC on May 3, 2015. BTC has increased 28.9x since then, so you'd have $11,564 as of today's date.

  2. Put $20 in each of the bottom 20 coins on May 3, 2015. In this experiment, 16 of the coins that you purchased die, so you lose $320. However, the remaining $80, which is spread across the four coins that survived is worth $19,060. This means that your net profit is $18,740, which is $7,176, or 62% more than you would have made if you'd invested in Bitcoin.

Finally, even assuming that you decide to count TGC, TRICK, and CNO as "dead" due to lack of trading volume/information, you've still made $11,140 from DOT alone–which is almost on-par with BTC.

I think the lessons here are (1) although a majority of low-ranked alt-coins die, it's nowhere near 99%; and (2) you should probably spread alt-coin investments out.

I'm also considering running this as an experiment with the current 522-542-ranked coins, but I probably don't have the cash right now. Feedback on this post is very much appreciated!

Edits: Typos, fixed a link