Market trend analysis of "altcoins" in 2020

In my recent article, I emphasized regular investment in mainstream currencies, especially regular investment in BTC and Ethereum. So some of our readers left a message after these articles and asked me about my views on other coins. These coins have also created a wave of enthusiasm, but now they are gradually cooling down in the industry.

What will be the trend of these coins in the next year, or more distantly, what will happen to the trend in 2020 next year?

1. Looking back at history to see the rise of altcoins

I think that to make a forward-looking judgment on this trend, it is necessary to examine and review the development trajectory and waves of the currency circle in the past few years, to see which altcoins have risen during this process, and how they have affected the entire industry during their rise. Quotes.

Since the birth of BTC, before the birth of Ethereum, basically the entire digital currency market was completely dominated by BTC. That period of time was also the process of digital currency popularization and dissemination.

Although in the process, new altcoins continue to appear, such as Ripple, Litecoin, etc. These altcoins have made some improvements to Bitcoin in some aspects and improved performance, but they have not broken through the framework of BTC in general. , and did not break the first-mover advantage of BTC, so the king status of BTC gradually formed and led the direction of the entire market.

What really broke this situation was the birth of Ethereum in 2014 and its subsequent rise.

Ethereum didn’t actually do much in its early days, and its performance, like many altcoins, was mediocre. The reason for this is that the functions of Ethereum in the early days were considered unimaginable and difficult to understand, and there were no popular application scenarios, so its functions seem to be no different from other altcoins.

It was not until the ERC20 token standard appeared on Ethereum, and it was accidentally discovered that it could be used for financing, that there was a popular ICO later.

It was also because of the emergence of ICO that the price of Ethereum began to soar, from 40 cents at the time of private placement to nearly 10,000 yuan.

The apex of this climax was at the end of 2017, two years after the birth of Ethereum. In other words, the outbreak of Ethereum also requires a process. If we count from the rise of the Ethereum ICO in 2016, it has been at least a year since the development reached its climax.

Since then, there has not been much innovation in the technological development and application of the entire digital currency.

From this process, we can clearly see two rules:

1) In the currency circle, if there are no popular applications, the entire market will only move forward under the leadership of mainstream currencies: before 2015, BTC was the only one; since 2017, although BTC is still the mainstream, Ethereum The role of the workshop can no longer be ignored.

2) Even if there are explosive applications of new technologies and new currencies, it is impossible to stand out from the crowd of altcoins without a certain period of development and brewing. It took Ethereum at least a year for this.

2. Judging the trend of altcoins in the next year from historical laws

Back to our topic, how will altcoins go in the rest of this year and next year in 2020? We use the above two rules to judge.

Let's first see if there are any popular apps in the currency circle.

Since the currency price went bearish at the beginning of 2018, there are basically three types of new applications that we can see: one is the derivative application on Ethereum, including the second layer expansion, DeFi application and various DAOs; the other is the oracle machine; The third is cross-chain.

Among these three types of applications, I think the cross-chain technology is not mature enough, and the ecology needs to be developed. This is different from the early days of Ethereum. In the early days of Ethereum, the technology was sufficient to support later applications, but the specific application scenarios were not discovered at that time.

For the oracle machine, the current technology is not very mature, but there are already cases of application, which proves that the technology is feasible, but the current application range is very narrow, and there are no popular applications.

I am very optimistic about various derivative applications on Ethereum, but unfortunately, they are currently subject to the technical performance of Ethereum itself, and it is not yet time to show their talents.

Therefore, among these three types of applications, even if there will be explosive models in the future, I think it will take time to brew, at least one year. Is it possible that in the near future there will be a new technology that is unknown now that will lead to explosive applications? Of course it is possible, but that also takes time. Therefore, it is calculated in this way that it is very unlikely that there will be explosive apps in 2020 next year, and there will be new technologies or altcoins that are out of their own market.

In addition to the three hotspots that I mentioned in the previous article that may detonate the market next year: Ethereum, Filecoin and BTC halving, they are all known mainstream currencies and long-awaited technologies in the industry. Their popularity and hotspots will overshadow the popularity and hotspots of other altcoins.

So from now until next year throughout the whole year, I think the market of the entire digital currency will still be dominated by the mainstream currency, driven by the mainstream currency, and the altcoins will follow.

Among the many altcoins, those who continue to make progress and release good news will occasionally show a little bit of their own market, but it will not be too prominent; for altcoins that have not made progress or released good news, they will gradually disappear and be eliminated.