Will all cryptocurrencies survive?

Although some will certainly find it hard to believe, there are already over 2,5 thousand different tokens on the cryptocurrency market. Most know Bitcoin and maybe a few more of the largest cryptocurrencies, but - contrary to appearances - many more are also doing great. But what about the smallest? Can we lose everything by investing in such projects?

The cryptocurrency market is relatively young, but it is growing at an exorbitant pace. In this text, we can omit Bitcoin and investing in Bitcoin, because it is a brand in itself. We will focus on other cryptocurrencies and check whether it is worth spending at least some of your hard-earned money on them.

First of all: high risk, so little capital

One thing is for sure: investing in cryptocurrencies is very risky. This does not need to be explained to anyone, but it is worth reminding about it. Profits undoubtedly provoke bold investments, but in the case of such risky assets, the principle of "not putting all eggs in one basket" should be crucial. It is often proposed to allocate no more to such investments than the amounts that we can simply lose and, with an unsuccessful investment, without stress and lowering the standard of living, to swallow the defeat.

And here we come to the point. Could it really be the case that an investment in cryptocurrencies will end up with a loss of all capital, because they will simply disappear? Let's check.

The operating costs of cryptocurrencies are negligible

Let's start with the fact that never in the history of the cryptocurrency market - of course short, but still the whole - has there been a cryptocurrency that would simply disappear. There are those whose price has dropped by up to 99%, but the cryptocurrency itself has not been liquidated. All because the costs of their operation are minimal and are borne by users. If they don't trade them, they don't bring out new ones - the entire cost of their issue has already been paid. If they extract and turn - the costs are covered on an ongoing basis. 

However, can the price drop to zero very quickly? Let's check these on the distant places in the ranking in terms of capitalization. Take, for example, Augur cryptocurrency traded locally. 100 cryptocurrencies have a larger capitalization, but people who are not aware of the cryptocurrency market Augur cap (REP) can make you dizzy. As of 99/04.02.2021/221, it reaches ... over USD 20,13 million with a token price of USD 11. That's still a long way from the record of $ 2018 on January 123,24, 11. Despite the huge drop in price, we still have 221 million tokens on the market worth - let us recall - over USD XNUMX billion. 

Well, cryptocurrency number 100 is perhaps not the best example. So let's check No. 500 for capitalization. At the moment, it is HOLD - a token that can be traded only on one cryptocurrency exchange. However, this did not prevent the growth of 540% over the last year. Today's capitalization is over $ 6 million. Let us emphasize once again - we are talking about cryptocurrency No. 500 in the ranking in terms of capitalization, and it is still worth more than the vast majority of quite large Polish companies. 

These numbers clearly show that investing in Bitcoin (this can be done e.g. via Bitcoin loophole) and other cryptocurrencies may be risky, but it is a market so large that it is hard to expect it to simply burst like a soap bubble. Even if the interest in some cryptocurrencies begins to decline, the demand for others will mean that with the appropriate portfolio diversification, you can count on really generous profits, also after investing in the smallest (currently) cryptocurrency projects on the market.