As the final week of 2019 approached, it offered a perfect opportunity to reflect on the dynamic and ever-evolving cryptocurrency landscape. The market witnessed significant shifts in rankings, technological developments, and regulatory challenges, painting a complex picture of growth and adaptation.
This comprehensive review breaks down the key movements and trends that defined the cryptocurrency market in 2019, offering insights into which assets gained ground and which faced obstacles.
Bitcoin: The Unshakable Leader
For many, cryptocurrency remains synonymous with Bitcoin. Despite a challenging first quarter that saw its market dominance dip close to 50%, Bitcoin staged a strong recovery, reasserting its position and widening the gap with alternative cryptocurrencies, often referred to as "altcoins."
Throughout the year, the entire crypto market remained highly sensitive to Bitcoin's price movements. When Bitcoin experienced volatility, the rest of the market often followed suit, underscoring its role as the industry benchmark.
Ethereum Widens the Gap Over XRP
At the start of the year, Ethereum and XRP were neck and neck for the position of second-largest cryptocurrency by market capitalization. In fact, XRP briefly overtook Ethereum in January and February.
However, as the year progressed, their paths diverged. Ethereum underwent several technical upgrades, strengthening its network and ecosystem. Meanwhile, XRP faced ongoing scrutiny over Ripple's regular sales of its XRP holdings. After Ethereum reclaimed the number two spot in February, the gap between the two continued to grow—especially during the market-wide uptrend in the second quarter, which XRP largely failed to capitalize on.
The Rise of USDT and the Struggle of Major Altcoins
The beginning of the year saw Bitcoin Cash (BCH), EOS, and Litecoin (LTC) holding the 4th to 6th positions. By year’s end, they had shifted to 5th through 7th, surpassed by Tether’s USDT—a U.S. dollar-pegged stablecoin.
Unlike volatile cryptocurrencies, USDT’s value consistently hovered around $1. Its market capitalization surged due to significant minting of new tokens, particularly during the third quarter when Bitcoin was trading above $10,000. The supply of USDT grew from 1.8 billion in January to over 4 billion by December—an increase of more than 100%.
Among the three major altcoins:
- Bitcoin Cash had a relatively stable year, aided by growing adoption in several countries.
- Litecoin underwent its much-anticipated "halving" event, which reduces the block rewards miners receive. Contrary to expectations of a price surge, the event was followed by a market downturn and miner shutdowns due to increased operational costs. This serves as a critical case study ahead of Bitcoin’s own halving in 2020.
- EOS faced persistent concerns over centralization. Its price fell below January levels, and it dropped to 7th in market cap rank.
Binance Coin’s Breakout Year
Binance Coin (BNB) started the year ranked 14th but climbed steadily into the top 10—even reaching as high as 6th—driven by a series of innovations from the Binance exchange.
Binance expanded its ecosystem by launching a decentralized exchange (DEX), an Initial Exchange Offering (IEO) platform, Binance Chain, margin trading, and futures products. Despite a high-profile hack that resulted in a $40 million loss, the company’s transparent response was widely praised. These factors helped BNB become one of the few major cryptocurrencies to reach an all-time high in 2019.
Consistency: 13 Cryptocurrencies That Held Their Ground
Beyond the eight cryptocurrencies already mentioned, five others consistently remained in the top 20 throughout the year: Bitcoin SV, Stellar, Monero, Tron, and Cardano.
These assets typically fluctuated between the 10th and 20th positions, often influenced by market news and sentiment. Two of the most notable were:
- Bitcoin SV, backed by the controversial Craig Wright (who claims to be Bitcoin creator Satoshi Nakamoto). It was affected by exchange delistings and a major lawsuit.
- Tron, led by the high-profile Justin Sun, who made headlines by engaging with everyone from Warren Buffett to climate activist Greta Thunberg. Despite the publicity, Tron continued striving to break into the top 10.
Emerging Trends: Staking Gains, Privacy Coins Fade
2019 saw the rise of staking—a process where users earn rewards for holding and "staking" certain cryptocurrencies to support network operations.
- Tezos was the standout performer in this category. It jumped from 23rd at the start of the year to finish in the top 10, thanks to partnerships with major exchanges that offered staking services to users.
- Cosmos, another proof-of-stake (PoS) cryptocurrency, also performed well after its April launch, maintaining a rank between 15th and 20th.
In contrast, privacy-focused cryptocurrencies like Dash, Zcash, and Monero faced a difficult year. Increased regulatory scrutiny led several exchanges to delist them, causing Dash to fall from 15th to 25th and Zcash from 20th to 32nd.
Frequently Asked Questions
What was the overall trend of the cryptocurrency market in 2019?
The market showed resilience with Bitcoin strengthening its dominance. Stablecoins like USDT grew significantly, while staking and PoS cryptocurrencies gained traction. Privacy coins, however, faced regulatory challenges and declined in ranking.
Why did Ethereum outperform XRP?
Ethereum benefited from network upgrades and a growing developer ecosystem. XRP was weighed down by concerns over Ripple’s sales of XRP and slower adoption progress.
What is staking and why did it become popular?
Staking allows cryptocurrency holders to earn rewards by participating in network security and validation. It grew in popularity due to its energy efficiency compared to mining and the ability to generate passive income. 👉 Explore more strategies for earning with crypto assets
How did stablecoins like USDT impact the market?
Stablecoins provided a safe haven during market volatility and became widely used for trading and liquidity. USDT’s market cap grew over 100% in 2019, reflecting increased demand for stable assets.
What lessons does Litecoin’s halving offer for Bitcoin’s upcoming halving?
Litecoin’s halving showed that price increases are not guaranteed post-event. Market dynamics, miner activity, and investor sentiment all play crucial roles. It highlighted the importance of evaluating fundamental factors beyond the halving itself.
Why did privacy coins lose market share?
Privacy coins faced delistings from major exchanges due to regulatory pressure and concerns over potential misuse. This reduced their accessibility and trading volume, leading to declining rankings.
The cryptocurrency market remains highly interconnected, with developments in one area often impacting others. As we move further into the digital age, the evolution of crypto assets continues to present new opportunities and challenges. The trends of 2019—from the rise of staking to the struggles of privacy coins—provide valuable insights for what may lie ahead.