Sector Analysis first half of 2020

Index Performance

This is the first half-year review since we started publishing our Sector Analysis Report. A great deal has happened over the past six months. We see this reflected in the very volatile sector performances.

Q1 2020 was quite dull. With the massive sell off around mid-March, the entire crypto trading sector took a serious hit. The total index gained 6.94% during this quarter. BTC$ performed even worse: down roughly 10%.

Throughout the beginning of 2020, altcoins were already performing nicely in dollar terms, but also against bitcoin. The interesting part is that smaller cap coins performed better than large cap altcoins. This was clear to see on the FTX ALT, MID, and SHIT indices.

Here is the performance chart of our sectors relative to the total index.

One sector (Exchange) helped keep the overall performance of the total index slightly positive. It makes a lot of sense that it was Exchange, since the volume during Q1 was already pretty good before the market crash. And during those couple of days, volume really spiked. This helped the exchanges to generate some nice profits during that period, and in return, it was reflected in their tokens.

Q2 saw a comeback rally. Especially in the smaller cap coins, the market needed only less than a month to recover the heavy losses from the March sell off. The total index performed at 63.86%, with BTC$ only recouping 43%. The big winners were in the Entertainment and Interoperability sectors.

Entertainment:

THETA +160%
ENJ + 124%
REP +94%

Interoperability:

REN +353%
LINK +171%
ICX +161%

It is probably perfectly clear to you now: altcoins outperformed BTC$ in the first six months of 2020. However, the performance distribution was very volatile. If you had tried to handpick some altcoins over this period, you could have also accumulated heavy losses.

The coins that lost the greatest:

GRIN -56%
ATOM -38%
LAMB -34%
CKB -32%

The winning coins:

KNC +564%
REN +370%
ZIL +297%
DGB +288%
CRO +285%
HBAR +275%

The overall year to date 2020 performance of the sectors relative to the total index looks like this:

Some of the larger cap altcoins are in the SoV sector. Hence, the slight underperformance.

The Privacy sector had a very good run right at the beginning of the year, but steadily gave back some gains over the past few months. The only coin that really stood out was XVG.

The Platform sector is one of the largest in terms of the number of coins it has. Some of the winning coins are in this sector, e.g. ZIL and HBAR. There are also some large cap coins such as ADA, with 192% performance. There are only a few coins that are underperforming relative to the total index. It reflects the growth and hype of the DeFi space, but also the general positive developments in the smart contract space.

The Payment sector also has many coins in it. It includes some performance killers, e.g. XRP, CKB, and BEAM.

In the Others sector, we have VSYS and ONT making this sector the worst performing one compared to the total index. BAT barely made it flat to the index, which was quite a surprise to me.

The IoT sector is continuously underperforming, but as it only includes two coins, this could change quickly.

Interoperability is an interesting sector. Here we have coins such as ATOM, which was the “darling” of Q4 2019. So far, it has been heavily underperforming in 2020. KMD is another poorly performing coin; at least it is keeping its trend. KMD has been showing a flat performance ever since September 2019. We do have some huge winning coins in this sector: REN, LINK, and ICX, which helped to propel it into 3^rd place.

File Storage had one big stinker, which turned the entire sector negative compared to the total index.

We mentioned at the beginning of our report that the exchanges made some good money during the volatile month of March due to the high volume that was traded. What is a bit disturbing (or hard to explain) is the underperformance of BNB. There was good volume on Binance, and a great deal of altcoin action happened during Q2 2020, which led to a great deal of BNB burning. I am not sure where all this supply came from, which kept the coin from rallying. The winning coins, LRC and KNC, are the result of the DEXs, which are back in focus.

Our last sector is the Entertainment sector. It also performed really well. It probably benefitted the most from COVID-19. Gaming/gambling and video streaming content are the topics within that sector. Clearly, these were things that people were engaging in during the lockdown.

Sector Analysis Sector Analysis Sector Analysis

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