By At the time of press, Bitcoin is not only the most valuable coin but it is also the most dominant. Commanding a market share of 71%, it is no wonder the pioneer digital asset has widespread support. But that was expected. Of course, Bitcoin’s rapid rise to present status has been humble, even bumpy-and will continue to be regardless of what it represents.
As it is, it has been labelled as digital gold. The asset’s main value proposition is its safe-haven status. That means, like physical gold or bonds, it doesn’t follow the ebbs and flows of the traditional financial market.
In recent times, Bitcoin has irrevocably proven that it doesn’t correlate with the stock market. Further, in times of economic turmoil, a section of the ultra-rich are brave (considering direct assault from political leaders and a section of monetary policy formulators) enough to funnel their fortune to the cryptocurrency.
Wait a Minute, Altcoins are not Thrash
Raved, Peter Brandt, a renowned technical analyst, now says Bitcoin is the only crypto with real and long-lasting value. Bashing altcoins, he compares them to Lead, triggering discourse on Twitter. While the level of Bitcoin dominance highlights the coin’s significance, trust and depth of liquidity, altcoins do play an important role in the sphere-and not “thrash” as insinuated.
Dash, Ethereum and Ripple are Solving Problems
Not only are some-like Dash, finding real utility in ravaged economies as Venezuela, but others as ETH, the native currency of the first smart contracting platform, did open the world, allowing startups to find alternative funding models.
Moreover, it is through Ethereum that developers can now build dApps that are immune to censorship while simultaneously addressing real-world problems.
On the payment front, Ripple Inc through XRP is fronting three solutions in their bid of building what Brad Garlinghouse, the CEO, and David Schwartz, the CTO, calls the internet of value.
For their effort, Ripple has been lauded by the World Bank and the incoming ECB Chair and former IMF Managing Director, Christine Lagarde.
That’s not forgetting that Litecoin is perhaps some sort of a “Bitcoin lab” where experiments are done-Segwit being an example, before implementation in Bitcoin’s source code.
Altcoins Front-run BTC prices
Practically, altcoins power several platforms and networks. Even though most are heavily correlated to Bitcoin, a base currency in most cryptocurrency exchanges, altcoins do front-run BTC prices.
As such, shrewd traders who are keen enough to figure out this special relationship can “long” BTC long before price related technical indicators signal “buys”, or exit longs before lagging technical indicators signal “shorts”.
At the time of writing, most altcoins are in red, registering double-digit losses. EOS, for example, is down 23 per cent in the last month while BTC is down a mere 10.1 percent in the same timeframe revealing a disparity that the market must correct.
Interestingly, EOS was the first coin to break lower yesterday. Moments later and as observed by a twitter user, Hodlonaut, LTC and several liquid coins dropped.
“Pretty interesting observation on yesterday’s dump from a friend of mine. EOS dumped super hard before Bitcoin even moved. ETH, LTC and other alts followed suit shortly after before the big dumping started on BTC. Draw your own conclusions.”
Inferring from the above, it is likely that BTC will drop lower as market forces seek equilibrium.
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