At the time of writing, there are 1,384 cryptocurrencies listed at Cryptocurrency Market Capitalizations. That means there are 1,383 'alt coins' (alternative coins) to Bitcoin. Now, most of us probably "lost our virginity" to Bitcoin when we first ventured into the then-shadowy world of cryptocurrencies. This is because it was, and still is, the most talked-about coin out there and we never forget our first love (or at least, it has a special place in our hearts). This brings me to the topic of this post. Bitcoin's market capitalization (presently at 34.5%) has been steadily dropping as shown in the chart below.
I'm not talking about the price of Bitcoin, by the way. That has been going up for most of 2017 and kind of holding steady (but at a significantly lower value bracket than its peak of approximately USD 20,000 in 2017). I'm talking about the percentage of the $780 billion or so market capitalization of cryptocurrencies, in general. It's basically only about a third of that number. In January 2017, it was over 85%. While there have been many explanations to rationalize this drop, the obvious answer seems to elude most of the financial "experts" and Bitcoin gurus. Clearly, while the price of Bitcoin could grow to even $1 million a coin (yes, some actually claim to predict this), the more likely scenario given the other 1,383 and growing number of alt coins, is that Bitcoin will continue to lose dominance and market capitalization to these coins.
Why is that? Is it because these alt coins are more secure and provide more value than Bitcoin? Are they faster? Do they incorporate newer technologies compared to Bitcoin which is 9 years old (this is tantamount to being a nonagenarian in the crypto world)? Well, in many cases it's all those things but most importantly, these alt coins have the most room to grow. A coin that is $1 is far more likely to grow in value to $1,000 than Bitcoin is to grow to $15 million. Just as it is far more likely to double in value (to $2) than Bitcoin is. In short, most investors know or eventually realize that they are virtually guaranteed to making more profit via alt coins; especially if they decide to hold on to the coins for the long term. Most of these coins really have nowhere else to go but up (and for many often way up). This is why many (including yours truly) have sold a significant portion of their Bitcoin position (heresy, I know) in favor of alt coins and profited tremendously from it. Some coins have gained 20x or more of their value in a matter of a few months. Doubling in value can even occur literally overnight.
This is the often unspoken reason many simply refuse to admit. As I said, Bitcoin has a special place in all our hearts and few of us would like to see it fall, almost like a god, from omnipotence. Unfortunately, this may be where we are headed and it hurts even more if the one to topple it is something like Ripple (a rather 'centralized' cryptocurrency that some say is merely the spawn of the traditional banking system which crypto was supposed to largely replace). Another reason, perhaps, is that if Bitcoin does indeed fall, we may lose the great symbol that started (and some would argue sustained) the whole idea of cryptocurrencies to begin with. Not unlike a society possibly falling into chaos and anarchy if the god they have always worshiped is ever proven false or replaced by different, more superior god-figure. Let me know your thoughts below. Is there some other reason or reasons that better fit the puzzle as to why Bitcoin is losing dominance to alt coins? Do you think this trend will continue?
I think Bitcoin is just running out of gas. Other altcoins are gaining tractions are just outperform bitcoin and the nature of a free market will reward innovators and phase out obsolete tech. However Bitcoin is too much of a juggernaut to ignore and will probably remain a giant as it is the gold standard for crypto.
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