Aaron Brown, Columnist

A Tool for Making Sense of the Cryptocurrency Markets

Filter out the noise and focus on the important trends.

January 3, 2018 at 4:46 PM UTC

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

Riding the wave.
Photographer: Jung Yeon-Je/AFP/Getty Images

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Bitcoin rose 88 percent from Dec. 1 to 19, then fell 23 percent by Dec. 30, a net 44 percent increase for the month. Attention naturally focused on those events, but the important longer-term story is what's happening within the entire cryptocurrency sector.

The market value of all non-bitcoin crypto assets rose 153 percent during bitcoin's upswing, and 4 percent more while bitcoin declined, for a return of 162 percent for December to a diversified investor in crypto ex-bitcoin. But there are more than 3,000 cryptocurrencies, tokens and assets. Each can have communities, networks and tokens that overlap but are not identical. And each has different technical underpinnings and use cases, and none has traditional financial metrics. So, how can an investor make sense of the market?