A Look Into Top 4 Crypto Assets Least Affected by the Bear Market: Similarities and Factors


Throughout the past 14 months, the crypto asset market experienced arguably the worst correction in its 10-year history.

Since January 2018, the valuation of the market dropped from $831 billion at its all-time high to $111 billion, recording a staggering 86 percent decline.

While most cryptocurrencies decreased by at least 80 percent from their all-time highs, there are a handful of digital assets that have outperformed around 98 percent of cryptocurrencies in the market.

Source: CoinMarketCap.com

4 Crypto Assets Least Down During the Intense Bear Market

According to ATHCoinIndex, with the exception of stablecoins and digital assets created within the last 12 months, the following four cryptocurrencies demonstrated the strongest performance throughout the correction:

  1. Binance Coin (-67.5%)
  2. Chainlink (-67.51%)
  3. Maker (-77.8%)
  4. Bitcoin (-82.7%)

Three common factors among the four cryptocurrencies that have been able to outperform the majority of digital assets in the market in the past year are strong fundamentals, an active community, and an actively utilized product.

Bitcoin

Bitcoin, as the most dominant cryptocurrency in the market, was always expected to perform strongly on a downtrend because it is the most widely used store of value and a method of payment in the digital asset sector.

As the New York Stock Exchange Chairman Jeff Sprecher said, despite the emergence of digital assets with seemingly better features and sophisticated infrastructures, Bitcoin finds a way to survive and become more resilient after every bear market.

“Somehow bitcoin has lived in a swamp and survived. There are thousands of other tokens that you could argue are better but yet bitcoin continues to survive, thrive and attract attention,” Sprecher said.

Throughout the past three months, some of the largest financial institutions in the world in the likes of Fidelity, ICE/NYSE, and Nasdaq have been building investment vehicles to support investors in the cryptocurrency market.

On February 6, CryptoMeNow reported that the transaction volume of Bitcoin actually increased by three-fold in 2018, possibly due to an overall rise in the usage of BTC as a currency and a store of value.

Source: Blockchain.com

Binance

A strong performance by Binance Coin (BNB) was somewhat expected by investors because of its coin burn. Initially, Binance Coin was created as a means to fund the company’s early-stage development.

Over time, as the company grew, it began to buy back the asset, burning the currency and decreasing the circulating supply of the asset.

Source: CoinMarketCap.com

As the supply of the asset decreased and the demand for BNB increased, the price of the asset started to increase.

“Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining,” the whitepaper of BNB read.

Currently, the Binance development team is in the midst of creating a decentralized exchange (DEX) and the next phase of Binance Coin will be to operate as the native currency on the Binance DEX.

The fundamentals of BNB is the exchange itself, which has more than 10 million active users and generates hundreds of millions of dollars in profit per quarter.

In 2018, despite the steep decline in the prices of crypto assets, Binance reportedly generated $446 million in yearly profit.

The company has also successfully expanded to several regions including Uganda, Malta, and Jersey, providing fiat trading pairs to improve fiat on-ramps, which Binance CFO Wei Zhou emphasized is key to improving the mainstream adoption of cryptocurrencies.

Zhou said in January:

“Through Binance Jersey, we want to help bridge the crypto-fiat channel for Europe and the U.K. as part of our global expansion to support broader cryptocurrency adoption.”

Binance is preparing to launch its fourth fiat-to-crypto exchange in Singapore and the exchange is said to have received the approval of the government last year.

On February 7, CryptoMeNow reported that Binance Coin became the 10th largest cryptocurrency in the market.

Maker

Maker is considered the most valuable decentralized application (DApp) on the Ethereum network.

The Maker platform has two currencies: DAI and MKR. DAI is a stablecoin that maintains its value through an algorithm-based system employed by Maker. MKR essentially presents an investor’s stake in the Maker network and the more MKR an investor has, more authority over the decision making on the network the investor has.

Simply put, Maker is a decentralized loaning system that enables individuals to borrow money in the form of DAI with Ethereum as collateral.

In September 2018, Andreessen Horowitz, a leading venture capital firm, invested $15 million in Maker, acquiring 6 percent of the supply of MKR.

At the time, Andreessen Horowitz General Partner Katie Haun said:

“MakerDAO’s technology, ecosystem and talent have put theory into action to deliver a decentralized stablecoin that we believe will help drive the future of the crypto economy.”

As of February, Maker reportedly has more than 2 million ETH as collateral on the network, which is equivalent to at least $200 million.

The active user base of Maker and the number of loans the DApp have been able to distribute have allowed MKR to retain a fair portion of its value throughout the bear market.

Chainlink

Chainlink is a smart contract protocol project that mainly focuses on implementing smart contracts to support real-world applications.

One of the large-scale institutions the team works with is SWIFT, the global network of banks that allow financial institutions to send and receive money.

The price of LINK increased by a large margin in January upon the launch of the Chainlink decentralized oracle network, which allows platforms to integrate smart contracts to process payments including fiat.

“Chainlink’s decentralized oracle network provides a secure solution that can easily connect STK smart contracts to APIs and send payments from our smart contacts to bank accounts,” the team explained.

Source: CoinMarketCap.com

Since mid-December, the price of LINK has doubled from $0.2 to $0.4.

Fundamentals are Crucial

The key reason behind the ability of Bitcoin to survive every major correction and secure its position as the most dominant and valuable currency in the market is its fundamentals.

Other crypto assets that have performed well against the majority of digital currencies in the market have had an active community of developers and working products which investors could support.

Most tokens and crypto assets have not been able to deliver on their promises following high-profile token sales and venture capital deals, which allowed cryptocurrencies like Bitcoin, Binance Coin, LINK, and MKR to outperform the rest of the market.


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Joseph Y

Joseph Yung is a financial analyst and investor who has worked in the cryptocurrency and technology sector since 2013. He's worked with leading publications within the cryptocurrency space, providing unique insights, interviews, market analysis, and technology coverage. You can contact Joseph at j@cryptomenow.com

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