CoinGecko has released a list of top-performing digital currencies throughout 2023. However, it must be noted that these gains could be short-term because many of these projects involve meme coins or initiatives that don’t really have a meaningful value proposition.
Despite their lack of real-world use-cases, cryptocurrencies are being widely traded globally because of heightened interest from speculative traders and investors. In most cases, altcoins or those cryptos other than Bitcoin and Ethereum, do tend to perform quite well during bull markets. This past year’s strong performance of virtual currencies indicates we are entering a strong bull market, where investors’ appetite for risk may be growing.
As noted in the update from CoinGecko, Bonk (BONK) is the “top” crypto gainer of 2023, increasing “by 7,302.9% from $0.0000002 on January 1 to $0.0000146 on December 28, 2023.”
Bonk made 2.5 times more returns “than Injective, the second top crypto gainer of 2023. Bonk’s airdrop marked a turnaround for Solana, drawing trader and investor attention.”
Although these gains are impressive, they are not based on any sound investment thesis or well-informed decision-making. Crypto remains a highly speculative space with not enough meaningful value for investors.
Despite these issues, the CoinGecko report pointed out that Injective (INJ) comes in “as the second top crypto gainer of 2023, increasing by 2,976.4% from $1.27 to $39.07. Injective rose when Helix, its decentralized exchange (DEX), introduced pre-launch token futures. Moreover, Injective established a $150 million ecosystem fund early in the year, aimed at accelerating the adoption of interoperable infrastructure and DeFi.”
The report also mentioned that CorgiAI (CORGIAI) is “the third largest crypto gainer of 2023, increasing by 1,959.7% from $0.00014 to $0.00282. CorgiAI gained traction as the main meme coin on the Cronos blockchain, following the trend where each chain is expected to have its own ‘meme coin’.”
The top 10 crypto gainers saw “returns ranging from 632.8% to 7,302.9%. Holding any of these crypto at the beginning of the year would have outperformed Bitcoin and Ethereum by at least 3.9 times.”
All 10 of the top crypto gainers in 2023 were also “among the most popular narratives, namely meme coins, layer 1 protocols, artificial intelligence and layer 2 solutions.”
The report added that 5 out of these 8 are stablecoins which “experienced a slight decline below their USD peg of $1.00, resulting in price declines of up to 0.3%.”
TON, CHZ and SUI are the only non-stablecoin “losers” in 2023, with their price “declines from 0.6% to 40.6%. However, do note that Sui was launched only on May 3, 2023, where its price closed at a high of $1.40, before reaching $0.83 on December 28, 2023.”
Bitcoin Performance in 2023
Bitcoin (BTC) outperformed 65 tokens “in the top 100 crypto, increasing by 162.5% from $16,540 to $43418 since the beginning of the year up to December 28, 2023.”
This suggests that “randomly picking a crypto from this group and beating Bitcoin’s growth in 2023 had about a one in three chance.”
In 2023, Bitcoin gained attention “with spot ETF applications from giants like BlackRock and Fidelity.”
Approval could significantly “broaden investor access and boost Bitcoin’s value.”
Bitcoin Performance vs Layer 1s
Bitcoin outperformed Ethereum (ETH), in 2023 “by 1.7 times.”
Bitcoin gave price returns “of 162.5%, higher than Ethereum’s price returns of 98.6% in 2023.”
Bitcoin also “outperformed 18 of the 30 layer 1s in the top 100 crypto in 2023. However, Bitcoin lagged behind the remaining 11 layer 1s, with four of them being in the top 10 crypto gainers.”
Holding INJ, KAS, SOL, or CFX, would have “yielded at least a 4.8 times greater return compared to holding Bitcoin and Ethereum at the start of the year.”
However, it is crucial to note “that the smaller layer 1s carry a much higher risk as they contend to gain market share from the two more established crypto, Bitcoin and Etheruem.”
Methodology
This study analyzed the price returns of “the top 100 crypto assets by market capitalization on CoinGecko from January 1, 2023 to December 28, 2023.”