The Cryptocurrencies Investors are Actually Holding
The cryptocurrency market is filled with doubt. Much doubt comes from unknowns. Unknowns regarding the legitimacy of specific assets, the adoption, the community support and more.
This article is intended to highlight the assets that are actually being held by crypto investors. This is not based on speculation, but actual data collected from tens of thousands of cryptocurrency investors.
Shrimpy executes up to 150,000+ trades every day for cryptocurrency investors. Each investor connects to exchanges that we use to complete orders. This has helped us create a snapshot of what assets are the most held by investors.
Definitions
Before digging into the data, there are two terms we need to define. These terms are “dominance” and “popularity”. In this context, we are using these terms for specific metrics.
Dominance - The dominance is calculated as the average percent allocation that is held by a specific asset across all user portfolios.
Essentially, this value is calculated by summing the percent allocation of each asset across every portfolio and then divided by the number of portfolios.
Example: If we have 10 different portfolios, each portfolio will hold a variable percent of each asset. Anywhere from 0% to 100% of a single asset.
Imagine each portfolio that holds BTC. The percent of BTC in each portfolio could be: 15%, 35%, 53%, 75%, 2%, 0%, 99%, 71%, 33%, and 100%.
The dominance is therefore: (15% + 35% + 53% + 75% + 2% + 0% + 99% + 71% + 33% + 100%) / 10 = 48.3%
Popularity - Popularity is the percentage of people that hold any percent greater than zero of the asset in their portfolio. Whether the person holds 1% or 99% it does not matter.
This value is calculated by summing the number of portfolios that hold ANY amount of an asset and then dividing by the total number of portfolios.
Example: If we have 10 different portfolios, each portfolio will hold a variable percent of each asset. Anywhere from 0% to 100% of a single asset.
Imagine each portfolio that holds BTC. The percent of BTC in each portfolio could be: 1%, 45%, 0%, 100%, 7%, 0%, 91%, 71%, 33%, and 37%.
The popularity is therefore: 8 / 10 = 80% (Notice the 2 portfolios with 0% BTC that are bolded)
Market Cap
One common way that cryptocurrency users have been determining the prevalence of an asset is through the market cap.
The market cap is determined by multiplying the number of tokens in circulation by the current price.
Asset Market Cap Weight
In the above image, we can see that Bitcoin has the highest market cap by a significant margin. In fact, Bitcoin owns about 66% of the total market cap when combining all cryptocurrencies.
Using this metric, we would assume that the vast majority of investors are primarily interested in allocating Bitcoin for their portfolio.
Popularity
Let’s take a slightly different approach. What if we looked at which assets were actually owned by cryptocurrency investors. Rather than basing our popularity on the market cap, we can evaluate the popularity based on what percentage of investors actually own the asset.
Asset Popularity
If we arrange cryptocurrencies in this way, we will notice that Bitcoin has the highest popularity, which could have been anticipated based on the large disparity in market cap. However, we will also notice that Ethereum and other altcoins are not that far behind. For example, 54.5% of investors own at least some Ethereum in their portfolio.
This may suggest that retail investors are far more interested in altcoins than would be indicated by simply looking at the market cap.
Dominance
Next, we will evaluate the top assets based on dominance. This will tell us the assets that hold the highest percent average weight across investor portfolios.
Asset Dominance
Looking at percent dominance in a portfolio, we can see even more interesting behaviors. Although Bitcoin holds the highest dominance of 26%, the values are far more distributed than the market cap metric. Ethereum, for example, has a dominance of 7.4.
Although this is a larger difference than asset popularity, it is far less than the market cap view. Similar to the popularity metric, these results can suggest that altcoins are more commonly added to investor portfolios than would be suggested by the market cap.
Notes
Looking at the specific assets that are represented in the above charts, we can observe a number of interesting outcomes.
Although Bitcoin SV is ranked 6 in market cap, it is neither a dominant nor popular asset among our sample of investors.
Bitcoin Cash under-performs in both popularity and dominance when compared to the assets market cap, coming in towards the bottom of the list.
Although tether is held in a high percentage on average, the percentage of users with USDT in their portfolio is low. This suggests a large percent of USDT is allocated by a subset of users. For example, maybe a small number of users have 100% of their portfolio in USDT.
Binance Coin over-performs in both popularity and dominance when compared to the assets market cap.
Basic Attention Token is ranked 31 in terms of market cap, but lists in the top 12 for both popularity and dominance.
All of the data that was shared in this article was collected from the Shrimpy application. Monitor your portfolio and track the market by signing up for a free Shrimpy account!
Shrimpy is an account aggregating platform for cryptocurrency. It is designed for both professional and novice traders to come and learn about the growing crypto industry. Trade with ease, track your performance, and analyze the market. Shrimpy is the trusted platform for trading over $13B in digital assets.
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