If you’ve been following the cryptocurrency trading scene online, you might see people talking about crypto tokens hitting their “ATH.” But what does ATH mean? We’ll explain its roots in the financial world.
All-Time High
ATH stands for “all-time high.” In cryptocurrency and online trading, the ATH is the highest price or market capitalization that a particular asset has reached in its entire history, since its listing. ATH is a way to discuss the potential value of a specific asset since it’s the peak price.
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The way people use ATH varies based on the context. On trading blogs and news websites, writers use ATH to discuss what valuation an asset has reached in the past. They might also report a coin or stock that recently reached a new ATH price. On the other hand, on cryptocurrency forums and social media platforms, ATH is used to speculate that a coin is about to hit its highest price ever. You’ll often see posts saying that a particular currency is about to reach a “new ATH.”
Since there’s no guarantee that the price of a coin will exceed its current ATH, the ATH of a coin is primarily a target for cryptocurrency enthusiasts. An asset exceeding its previous ATH is a positive sign for its trajectory.
What Reaches an ATH?
There are a few asset types that can have an “ATH.” The first is cryptocurrency coins like Bitcoin. These are a form of currency intended to be an alternative to fiat money, such as the dollars you might have in your bank account. Many people use cryptocurrencies as an investment tool, so a particular coin you own hitting an ATH is probably great news. That means it has almost definitely exceeded your initial investment, no matter how much you own of it.
Additionally, you might see people using ATH to refer to the prices of more traditional investment methods like stocks. You’ll frequently see ATH crop up in online communities focused on the stock market r/WallStreetBets. During the Gamestop incident in 2020, where retail investors drove up the prices of the GME stock to incredibly high levels, many people were posting about GME hitting ATH values.
Lastly, besides price, ATH might be referring to an asset’s market capitalization, or “market cap” for short. A coin’s market cap is its total value, obtained by multiplying the total number of available coins by the price of a single unit. For example, if there are 1000 coins and the value of each is $500, then the total market cap would be $500,000.
Where ATH Comes From
The idea of an “all-time high” has been around for a long time for those who invest in capital markets. During economic prosperity, stock prices hitting new all-time highs is considered a sign that companies are performing well. On the other hand, when a company reaches an ATL or “all-time low,” it’s viewed as a negative sign.
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ATH became a more prominent term on the internet with the rise of cryptocurrency. On top of the use-cases for cryptocurrency, many people treat crypto as a speculative investment. This means that people will keep track of the value of their portfolio, as pegged to currencies like the US dollar, and hope for it to go higher based on the movement of the market. Due to the influx of consumer investment in blockchain tech over the last several years, more and more crypto tokens have hit all-time high values.
However, a coin hitting an ATH does not necessarily indicate future success. New currencies are introduced and fizzle out very often, with some coins hitting their ATH within the first week of being listed then never hitting it again. On the flip side, some coins hit their ATH only to exceed that value again several months later.
ATHs vs. ATLs
On the opposite end of ATHs, assets also have ATLs or “all-time lows.” While discussion about an ATL is less common, some instances where discussing the ATL of an asset might be warranted.
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For example, if a particular coin has “crashed,” which means drastically fallen in value, it might experience a new ATL. This all-time low price will be even lower than its listing price, or the price it was initially sold for. This might signal potential buyers to avoid investing in this particular asset.
ATL is also a term you might see in financial news when companies have a drastic fall from grace. For example, some firms might have an enormous scandal that tanks the company’s value. If they’re publicly listed, this might trigger the stock price to drop dramatically and reach a new all-time low.
Trading cryptocurrency is very risky, so never invest more than you can afford to lose. Stay safe out there!
