How was 2019 for Crypto?

A lot of people wonder - was this a good year for crypto?

The answer, as usual, is - it depends. It depends on both the relevant parameters as well as the coins, projects and networks that we choose to feature and focus on in our end-of-year tallies.

Does your definition of a ‘good year’ mean that BTC is worth more today than it was on January 1st, 2019? If so - it was another terrific year for crypto, as the king coin’s market cap grew by a cool 92% over the past 12 months.

And while that might be good enough for Bitcoin maximalists, it would be a gross oversimplification of the collective state of the industry.

Without further ado, let’s jump right to it.

Risk-adjusted returns

Though it may not feel like it right now, the total crypto market cap grew by a formidable 56.7% in 2019. The biggest culprit, of course, is Bitcoin, which continues to act as a reliable proxy for the entire crypto market. To date, the top coin gained 92% compared to January 1st, 2019, much of it in the first half of the year.

Other strong performers on the year among the top 20 coins include LINK (+507.5%), BNB (+125.9%) and - to a lesser extent - LTC (23.7%).

Not everyone in the top 20 had a good market year, though. Despite a strong Q2, Ethereum has failed to sustain its summer momentum, and is currently hovering just below breakeven point (-0.7%).

The ‘biggest loser’ award goes to XRP, which is currently down -47.7% on its December 2018 valuation.

Raw returns are, of course, an imperfect measure of an asset’s performance. For serious investors, it is often equally important how risky the asset proved in the observed time frame.

This is where the Sharpe ratio comes in, which adjusts the performance of an asset based on risk, or how bumpy the road to these end returns has been. The higher the Sharpe ratio, the better, as it either means that the returns were relatively high but the associated risk was low, or that the risk was high but the returns proved even higher.

That said, here are the top 20 coins (out of those that reached top 100 by market cap) by Sharpe ratio in 2019:

The best Sharpe ratio among cryptocurrencies in 2019 goes to Seele, an Ethereum-based project that describes itself as ‘blockchain 4.0’. Other notable mentions on the list include Chainlink (#4), Tezons (#8), BNB (12) and of course, Bitcoin itself at #13.

For added context, it’s also worth calculating a variation of the Sharpe ratio called the Sortino Ratio, which only takes into account downside volatility. The premise here is that most investors will actually welcome upward spikes - no matter how big - so those are omitted from the Sortino ratio.

In other words, the Sortino ratio only analyzes the size and volume of the coin’s downswings relative to its returns. Here are the top 20 coins by Sortino ratio in 2019:

As evident, the list of crypto assets by the Sortino ratio remains fairly similar, with only a few minor adjustments to seeding (such as LINK overtaking the third spot).

Best days to trade in 2019

In traditional investing, it’s a well-documented phenomenon that certain days of the week tend to be more profitable than others. But which days proved the best for crypto traders in 2019?

Using Bitcoin as a proxy for the whole market, we can see that 2019 had clear winners and losers in terms of daily performance:

Saturday was the best day for BTC in 2019, with average returns of 1.02%, followed by Tuesday (0.63%) and Thursday (0.52%). I guess Bitcoin loves even days?

On the other hand, Friday was by far the worst time to get into BTC, with an average loss of -0.88%, followed by Wednesday (-0.35%) and Monday (-0.04%).

The daily 2019 trends are not Bitcoin-specific either: the same pattern has held true for major altcoins like Ethereum throughout the year, with the main difference between the two marked by their Sunday performance(s):

Compare the above chart(s) with Bitcoin’s daily average performance during 2018, when all but a single day were sitting comfortably in the red:

Closing Thoughts

Market ebbs and flows are perfectly natural - especially for a nascent industry like crypto. The purpose of this report isn’t to officiate 2019 as either ‘bullish’ or ‘bearish’, but to shine an important light on the general market, social, development and on-chain conditions and trends over the past 12 months, and make you a better-informed industry participant in the process.