Cryptocurrency
Research Shows 95% of Altcoins Are Illiquid
Source: The Block 95% of Altcoins are Illiquid Following a recent report from Larry Cermak of the Block, researchers found that 95% of altcoins listed on coinmarketcap.com have insufficient liquidity. Cermak defines illiquidity as any cryptocurrency with less than $10k of combined orders, both bid and ask. According to this definition, 94.6% of all cryptocurrencies […]
Source: The Block
95% of Altcoins are Illiquid
Following a recent report from Larry Cermak of the Block, researchers found that 95% of altcoins listed on coinmarketcap.com have insufficient liquidity. Cermak defines illiquidity as any cryptocurrency with less than $10k of combined orders, both bid and ask. According to this definition, 94.6% of all cryptocurrencies are illiquid. 
Cryptocurrencies With the Deepest Liquidity (Excluding Stablecoins)
Additionally, Cermak followed up with a report highlighting the cryptocurrencies with the deepest liquidity. According to their research, Bitcoin is 5x more liquid than Ethereum, the next closest competitor.
Altcoin Exodus
Many Bitcoin enthusiasts have forecasted the demise of 95% of current altcoins in existence. However, ‘demise’ has multiple meanings. For instance, some believe all altcoins will go to zero, but this simply isn’t the case. Udi Wertheimer explains in a tweet how illiquidity will be the death of altcoins:
Conclusion
The reality is that 95% of cryptocurrencies are irrelevant and used solely for speculative trades. This is also a reason why Bitcoin will likely remain the dominant cryptocurrency. Liquidity is similar to network effect. If a cryptocurrency has 5x liquidity, in all likelihood it has a significantly greater network effect when compared to others. After observing the graphs highlighted by Cermak of the Block, it is apparent that Bitcoin’s first mover advantage in both liquidity and network effect is unparalleled to any other asset in the cryptocurrency industry.