The massacre of cryptocurrencies across the board is perhaps one of the most glaring examples of how brutal financial markets are when it comes to the first principles. Meme coins and digital currencies which were once deemed as the future of money are now called dead and forgotten by many. Even the most ambitious and forward-looking tech investors sound gloomy when it comes to crypto future. For example, Chamath Palihapitiya, who once told investors that Bitcoin would replace gold and set a price target of $200,000 for the digital currency, recently said that crypto is “dead” in America.
Individual and institutional investors have suffered huge losses in crypto. In August, a Bloomberg report cited data from Switzerland-based investment adviser 21e6 Capital AG, which said that about 13% of crypto-focused hedge funds have shuttered so far in 2023. The report said that crypto funds generated average returns of about 15.2% so far in 2023, underperforming Bitcoin. The report from 21e6 Capital AG highlighted the strong performance of Bitcoin and said that most of the crypto funds underperformed Bitcoin so far in 2023 due to the aftershocks of the crypto crash of 2022. Amid huge volatility and the collapse of FTX in 2022, crypto funds had larger than normal cash positions. These funds usually retain cash as base currencies and also receive subscription amounts in fiat currency. Given the volatility, many of the crypto funds had huge cash positions, which is why they were unable to go all in Bitcoin amid the 2023 bull market. The report also said that many crypto funds are unable to find partner banks amid collapse of many banks and broader industry volatility. But there was a time when institutional investors were pouring money into digital currencies. According to PwC, just in the first quarter of 2021, between 150 and 200 active investment funds invested directly in coins and tokens as their main investment strategy (excluding venture capital funds), and 81% of these vehicles were launched in 2017 and 2018. The total assets under management of these crypto funds touched a whopping $3.8 billion in the first quarter of 2021, up from $2 billion from the previous year.
Creative Destruction in the Crypto Industry
But many believe the crypto crash would help solve the structural problems in the industry and would bode well for crypto investors and companies in the long run. For example, in its crypto outlook report for 2023, Coinbase said that the crypto crash of 2022 caused a “creative destruction” that would create new opportunities. The report also said that heavy losses seen in 2022 would cause institutional investors to flee towards quality and avoid speculative currencies. The report also said that the problems seen in 2023 would force companies to improve asset classes. The Coinbase report also highlighted that the correlation between crypto and equities/commodities is weak but not totally absent. The report at the time said that companies were pulling back on their risk taking amid recession risks. The uncertainty in the crypto and broader markets had caused investors to flock to two cryptocurrencies: Bitcoin and Ethereum. This, according to the report, unlocks more value in these currencies and the fundamental theses of investing in these currencies remain unchanged.
Talking about altcoins, the Coinbase report said that the tendency among investors to accumulate altcoins would take a hit in 2023 amid the crypto crash of 2022. Many of the new projects failed to take off because of industry-wide volatility, while others that were unable to bear losses had to declare bankruptcy. These companies, according to the report, would be unable to access funds and retain key developers. This would exacerbate the problems of smaller projects, ultimately favoring larger cryptocurrencies like Bitcoin and Ethereum.
The report also paints a bleak picture for crypto miners and said:
“The precarious economic conditions for bitcoin miners appear unlikely to improve in the near term amidst continued weakness of broader crypto markets. Recent Glassnode data (November 18, 2022) suggests bitcoin miners are selling ~135% of coins mined per day, meaning miners are liquidating the entirety of their newly mined coins as well as portions of their BTC reserves.⁸ The events of early November prompted increased bitcoin miner selling, bringing aggregate miner reserves back to levels last seen at the beginning of 2022 (78k BTC as of November 30, 2022 according to Glassnode).⁹ Outside of the continued pressure on bitcoin prices, elevated network hashrate and resultant mining difficulty are further complicating matters for miners.”
Crypto Bulls: A Perspective
Despite the doom and gloom sentiment, you will always find strong crypto bulls and the surge of Bitcoin in 2023 motivated these bulls and created hopes of a wider crypto rebound. In the start of 2023, Bernstein analysts Gautam Chhugani and Manas Agarwal said in a note that crypto would rebound and the problems caused by the collapse of FTX were not widespread. The analysts said that what keeps crypto’s survival instinct strong was its decentralized nature.
"FTX was terrible for the reputation of the sector and affected the faith of institutional investors, who invested in FTX. But FTX was 10% of the global trading volume and used mainly by wholesale participants such as brokers, trading firms, and large traders,” the analysts said.
The analysts also said what the Coinbase report said: the problems in the crypto industry seen in 2023 would force companies to make improvements, thereby opening new opportunities. For example, the collapse of FTX, according to Gautam Chhugani and Manas Agarwal, would hasten the widespread adoption of DeFi in the industry. They also believe that investors will move away from speculative buys and instead focus more on crypto projects that have real-word projects and strong backing.
Bloomberg’s Mike McGlone had sounded similar optimism during the start of 2023. The analyst said that the crypto crash of 2022 created a lot of problems for many speculative cryptocurrencies but the analyst believed ultimately strong currencies like Bitcoin and Ethereum were set for a rebound. The analyst was hopeful that Ethereum would outperform Bitcoin in 2023. The analyst recently said on Twitter:
“No Longer Too Cold, #Bitcoin May Resume Reversion - Some enduring Bitcoin momentum measures have rolled over, which may make it necessary for the crypto to prove strength. In November, Bitcoin reached the steepest discount vs. its 100-week moving average since it could be calculated and recovered to near this level in July. No longer too cold, and with this momentum metric pointing downward, my bias is to respect the trend until proven otherwise.”
Cryptocurrencies to Buy and Hold for 10 Years: Evaluating Crypto Predictions
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Crypto Prediction 2023
No crypto piece could be complete without an exciting crypto prediction. We like one by Standard Chartered. The bank said that Bitcoin could reach $50,000 by the end of 2023 and a whopping $120,000 by end-2024. The bank had previously expected the currency to reach $100,000 by 2023-end but revised its outlook amid the banking crisis that shook the traditional financial industry.
Our Methodology
When we searched Google for the 10 cryptocurrencies to buy and hold for 10 years for articles that were published in 2022, it pointed us to this article by a website named Analytics Insight. In this article, we are going to take a look at the performance of each of these cryptocurrencies since the publication of this article.
The point of this article to simply assess the claims of one of many websites about the best cryptocurrencies to buy. Almost all of these cryptocurrencies lost a lot of value over the past year. But would they rebound and are they good investments for the next decade? One could say yes for only a couple of these currencies but for most of them, especially the meme coins, their trajectory does not look promising and they cannot be called the top crypto picks for the next 10 years.
The purpose of this article is by no means to label some cryptocurrencies as the top buys for the next 10 years. In this article, we just wanted to analyze, evaluate and assess the performance of some cryptocurrencies that were labeled as top buys for the next 10 years last year by a website. It’s always fun to analyze and evaluate expert predictions and since cryptocurrencies are heavily correlated when it comes to returns and move along each other amid broader market movements, it’s interesting to analyze their returns over the past year.
With each cryptocurrency, we have mentioned its returns since January 11, the day when the Analytics Insight article was published.
Top Cryptocurrencies to Buy and Hold for 10 Years: Evaluating Crypto Predictions
10. USD Coin USD (CCC:USDC-USD)
Returns Since January 11, 2022:
USD Coin USD (CCC:USDC-USD) is a digital stablecoin that is pegged to the US dollar. USD Coin USD (CCC:USDC-USD) is managed by a consortium called Centre, which was founded by Circle and includes members from the cryptocurrency exchange Coinbase and Bitcoin mining company Bitmain, an investor in Circle. Its price has remained stable and unlike TerraUSD, which lost its USD peg, USDC has shown its mettle even during difficult times.
9. Fetch.ai USD (CCC:FET-USD)
Returns Since January 11, 2022: -48%
Fetch.ai USD (CCC:FET-USD) is a blockchain platform that uses AI to help people automate everyday tasks. Fetch.ai USD (CCC:FET-USD)’s cryptocurrency FET has lost about 48% in value since January 11 despite a huge buzz around AI this year.
8. Samoyedcoin USD (CCC:SAMO-USD)
Returns Since January 11, 2022: -88%
Samoyedcoin is a dog-themed meme coin which is known as Solana’s meme coin, its top “ambassador.” While the coin does not seem to have any long-term growth catalysts, it was pitched as a top cryptocurrency to buy and hold for 10 years in the article we are basing this analysis on. However, SAMO has lost about 88% in value since January 11.
7. Axie Infinity USD (CCC:AXS-USD)
Returns Since January 11, 2022: -94%
Axie Infinity USD (CCC:AXS-USD) is a non-fungible token-based online video game developed by Vietnamese studio Sky Mavis. This coin was also pitched as a top coin to buy and hold by the Analytics Insight article. But Axie Infinity USD (CCC:AXS-USD) has lost about 94% in value since January 11.
6. Avalanche USD (CCC:AVAX-USD)
Returns Since January 11, 2022: -89%
Avalanche USD (CCC:AVAX-USD) is a blockchain platform that promises to solve the problems of scalability, security and decentralization. Avalanche cryptocurrency is pitched as an alternative or rival to Ethereum. Avalanche USD (CCC:AVAX-USD) has lost about 89% in value since January 11, 2022.
