2018 Has Shown Bitcoin is Still the Best Crypto Money

2018 Has Shown Bitcoin is Still the Best Crypto Money

With all of the hype around tokenizing anything and everything in the world via initial coin offerings (ICOs) in 2017, many people forgot about the original use case that blockchain technology was originally created to enable — bitcoin as a permissionless, digital money. A lot of the fluff from 2017 has disappeared (though plenty also still remains), but bitcoin’s use case as money hasn’t wavered. Indeed, the data shows that bitcoin has had by far the best year so far in terms of acting as a digital form of money.

2018 Was Less Bad When Holding Bitcoin

2018 has been an extremely rough year for the crypto market. In the aftermath of the late 2017 bubble, the market cap as a whole is down roughly 65% year-to-date (YTD) at the time of this writing, according to CoinMarketCap.

Having said that, bitcoin has fared much better than the rest of the market. For example, ether is down around 41% against bitcoin YTD, bitcoin cash is down a little over 50%, and monero is down roughly 35% (this data is again via CoinMarketCap). These are generally regarded as three of the top altcoins on the market.

One of the key attributes of a good money is its ability to hold its value over long periods of time so it can be stored as savings. It’s clear that bitcoin was the king of storing value this year when compared to the major altcoins.

Bitcoin Was Also More Stable Over the Short Term

In addition to holding its value over the long term, it’s also important for a good money to remain stable over the short term, so it can be more easily used in payments and other value transfers. No one wants to send someone an invoice denominated in bitcoin and then receive less actual value when the invoice is eventually paid.

These days, bitcoin and altcoin payments are still almost entirely denominated in fiat due to their relative price volatility, which means this area is mainly about reducing volatility risk for those who are mainly using a cryptocurrency as a medium of exchange and wish to move in and out of fiat currencies on a regular basis.

Price stability is also a key component when digital assets are used to back some types of stablecoins.

According to data from Coin Metrics, bitcoin is again the clear winner in terms of price stability, especially in the second half of the year where ether is the only altcoin that approaches bitcoin’s level of price stability.

So, in terms of acting as a stable store of value over the short term and losing less value over the longer term, bitcoin has proven it still holds the throne as the best digital money out there in 2018. Some might say that privacy altcoins or altcoins focused on cheap payments may be better forms of money than bitcoin, but these types of coins also make tradeoffs that negate some of their alleged benefits.

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