Top 25 Projects in Crypto- March 2020
Who is in, who is out?
Members of the FCAS 25 are reevaluated each month and must be ranked within the top 25 for at least 40 days to qualify. Considering this month’s rollercoaster of events it may come as a surprise to find that the list today is the same that it was a month ago. The truth is, fundamentals are more stable than price. The good news, they’re also more telling of a project’s potential for growth.
Tough Times Never Last but Tough Projects Do
This month the crypto markets experienced a violent crypto market crash on March 12th, as COVID-19 sank markets across the world. Both price oracles and trading platforms struggled to manage the high network congestion that Thursday. Some exchanges were forced to trigger emergency shutdowns to meet short term liquidity and capacity requirements. By the end of the week, the total market cap for crypto had fallen ~35%, a loss of US$85 billion in value. Today, prices are still down 24% on a month-to-date basis.
Yet, when you go beyond price and look at fundamental data, projects with the strongest user base and developer contributions did not lose momentum despite the month’s uncertainty. As outlined in previous posts, we saw continued progress across the board, from Litecoin becoming accessible on ATMs in South Korea, to Kyber Network announcing a major protocol upgrade, and the Maker community coming together to mitigate the sudden Ethereum (ETH) price crash. What this month proved is that projects that go beyond speculative trading and put forth a vision that people can believe in and support, are the ones who will stand the test of time.
Stablecoins Gained Momentum
During the recent market carnage, stablecoins benefited from a flight to safety and stability. While Tether comprises the majority of stablecoin activity, USDC and DAI have matched Tether’s growth rate in 1Q2020. Tether’s growth is driven by the increase in arbitrage opportunities resulting from higher volatility, while USDC and DAI are seeing broad adoption in the nascent DeFi space.
Exchanges Made a Killing
Exchanges have benefited greatly from this month’s volatility, due to the fact that their main source of revenue comes from trading fees. On March 12th, when Bitcoin lost 37% of its value, Bitfinex’s volume exploded almost 1,000%, while Coinbase saw $1.3 billion in fiat and cryptocurrency being deposited, comprising five times the typical average. Coinbase also notes a more than 10% increase in buying pressure relative to selling — with buyers representing 67% of all trading activity, up from 60% typically.
A month ago, everyone was scrutinizing the price of Bitcoin to see if it would become a safe haven for investors, or a hot potato. Thirty days later, the answer is still unclear, but the question feels irrelevant. The unprecedented price volatility that hit the industry this month has instead shifted the conversation to usability, and the question of how to go beyond speculative price to drive mass adoption.
Recent events prove that users are not running away from crypto. Instead, they are reshuffling and trading cards, placing their money where they see solutions to real world problems. And while the crypto market has not yet proven to be a safe haven for investors, its inherent decentralized nature frees up space for novel ideas to take root. Momentum will naturally follow if fundamentals can grow.