A recent analysis conducted by Diar has found out that only a very small part of the virtual currencies in the market makes up for more than two thirds of the total volume. Six tokens, which are the equivalent to 0.36% of the tokens in the market, comprised 69% of the total trade volume in the entire market.
The data was used from the Coinmarketcap on June 18, 2018.
Report Indicates that Liquidity Across The Majority of the Cryptocurrency Market is Near Non-Existent.
According to the report which was recently published, over half of the volume of cryptos (including more than 1600 coins) was produced by only five pairings: Bitcoin (BTC), ETH (Ethereum), XRP (Ripple), BCH (Bitcoin Cash) and LTC (Litecoin).
The data shows that Bitcoin is at the top, as would be expected, with 33% of the trade volume on it market. BTC is followed by ETH (12%). Together, these two tokens have almost half of the total volume. You can also see Ripple with 2%, Bitcoin Cash with 3% and LTC with 2%, which adds up for more than half of the trades.
Tether USD (USDT) accounts for the other 17% of the trades that are happening right now with the rest of the tokens having only 31% of the trade volume.
The findings are impressive, as they show that most tokens do not have a high liquidity at all. In fact, the study also show that a third of the market (542 tokens) does not have even $1,000 USD in liquidity in over 24 hours. Only 6.3% of the tokens had more than $5 million USD in liquidity and almost half of them did not even have $10,000 USD.
This means that the market really orbits around the big cryptos while many of the new altcoins appearing in the market are simply forgotten and left there, which is a sign of how overcrowded the market is right now.