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Gate.io Research: Research on 2019 Cryptocurrency ROI and Analysis of Investment Strategy

2020-03-19 12:27:44Read:41933

The year of 2019 saw exciting developments in the cryptocurrency industry. What has happened in the past year doesn’t only serve as the reference for the development trend in 2020, but also as the driving force of the industry. To analyze the return and risk of investment in cryptocurrencies in 2019, Gate.io Research applied analytical techniques from traditional finance on the data of the top 200 cryptocurrency projects ranked by market cap. We also analyzed the Shanghai SE Composite Index, the Dow Jones Industrial Average Index, and the price of gold and oil to further compare the ROI between crypto investment and traditional investment. Additionally, to provide insights on investment strategies for individual investors, Gate.io Research simulated and observed the ROI of regular investors when using common investment strategies such as value averaging and periodic payment plans.

Key Takeaways:

- According to the analysis, the ROI of cryptocurrency investment in 2019 was far lower than that of traditional investment; the risk of cryptocurrency investment is over 5 times higher compared to any traditional investment.
- The token price of vertical application projects is more volatile compared to those of projects which focus on underlying infrastructure and common technologies.
- Based on the result of investment strategy simulations, AIP(Automatic Investment Plan) is more time saving regarding position sizing. With this strategy, the user’s profit aligns with the general market trends, while value averaging can effectively lower the investment risks, but the return rate is lower by half and the position sizing is more time consuming with this strategy.
- The returns of gold, American Stocks and oil investments were not ideal using value averaging investment strategies in 2019. The analysis also suggested that value averaging is not suitable for assets with low volatilities such as gold.
- Based on the result of investment strategy simulations with Bitcoin, no matter which investment strategy a trader uses, the return and risk are both higher than that of any traditional investment. In general, cryptocurrency investments are more suitable for aggressive investors, while traditional investments are more suitable for conservative investors.

Click here to download PDF report

Disclaimer: Based on the due diligence and objective analysis by internal staff, the research draws conclusions based on the observed market data. However, it should not be treated as the sole basis of an investment.

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Gate.io
March 19th, 2020