Binance, one of the most important exchanges of the crypto world, has released its latest report on the situation of the market criptoactivos In the same, it shows not only which are the cryptocurrencies that, like Bitcoin, got a good performance in the year 2019. But in addition to the real correlation between the price of different criptoactivos. For this reason, since CriptoTendencia, we want to expose for you the most important points of this document.
The performance of the cryptocurrencies
The first fact worth knowing, is the performance achieved by the top 10 cryptocurrencies in the world. Which, as we can observe in the table produced by the team of Binance, was marked by an upward trend during the first half of the year, and a significant drop at the end of the same. However, when you compare the end result in the price of the cryptocurrencies at the end of the year 2019, we see a trend mixed between the criptoactivos. Thus, while some currencies such as Bitcoin Cash, or Litecoin ended the year with net earnings in your quote. Others, like Ethereum, XRP or Monero, ended the year in worse conditions than when you start it. Thus, 6 of the main cryptocurrencies of the world showed net losses, being the most dramatic case of Stellar Lumens, with a fall of -60.78% in your quote. While 4 of these cryptocurrencies had earnings, with Binance Coin to the head with an increase of 127.56%, closely followed by Bitcoin with a 86.78%.
The dominance of Bitcoin
The net increase in the price of Bitcoin, even facing significant losses in the third and fourth quarter of the year, is related to its domination of the crypto market. That is to say, the capitalization of the total market criptoactivos corresponds to the Bitcoin. And in this regard, during the year 2019, we could observe an increase in the dominance of BTC on the market. Climbing from 52% at the beginning of the year, to close at 68%. That would mean that only 32% of the market value of cryptocurrencies corresponds to different currencies to BTC. The domination of the Bitcoin on crypto market is growing This figure also corresponds with the progress of the domination of Bitcoin on the transactions performed in Binance. That is to say, the percentage of operations in the market in which Bitcoin is the currency base of the exchange, a figure in which there was also a significant increase. And is that, if, during the first half of 2019 domination over the operations, Bitcoin came to be below 20%. The increase in the price of BTC during the first half of the year, added to the fall even more deeply of their rivals in the second half. Allowed an increase in the interest of the market in the criptoactivo, which took place the domination of the operations of Bitcoin in Binance, between 45% and 50% by the end of the year 2019. The domination over the operations, Bitcoin is becoming more and more patent
The correlation between the cryptocurrencies
Finally, the last important aspect to note in the report of Binance, is the correlation between the prices of the cryptocurrencies. Because, as I’ve highlighted on multiple occasions here in CriptoTendencia, the prices of the different currencies in the crypto market are strongly related with each other. Generally along the wake left behind by the trend in the price of Bitcoin. This analysis is now confirmed, thanks to the quantitative study of Binance, which shows a significant correlation between all cryptocurrencies between themselves and with the Bitcoin. A trend that also deepens with the size of the criptoactivo, then, are the main cryptocurrencies as Ethereum, XRP and Bitcoin the greatest correlation in the price are between if. Graph of Binance showing the correlation between the different currencies, The chart above allows us to observe this phenomenon graphically. Thus, any pair of currencies with a correlation above 0.50 are considered very related to each other, and below 0.50 distantly related. From which we can extract two conclusions little discussed, but very interesting. The first of these is the relationship that seems to exist between coins of the same sector. Therefore, if we look at the correlation between cryptocurrencies with blockchains programmable as Ethereum, EOS and NEO, we see that their correlation is much higher that with other criptoactivos. Something that is repeated in cryptocurrencies with Proof of Work as a method for mining such as Bitcoin, Bitcoin Cash and Monero. For its part, the second conclusion would be that the report has been referred to as the “effect Binance”. Therefore, those cryptocurrencies that are available for operations within the platform of Binance, seem to have a correlation much higher that with other criptoactivos. Showing the importance of participating in the same market. The following two tabs change content below. Student of International Studies, interested in issues of economy and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and the cryptocurrencies in particular.