Steemit Crypto Academy Homework Post on Cryptocurrency Market for @imagen

Hello everyone especially to members of the crypto academy community. This is my entry to the homework task on Cryptocurrency Market Dominance.

source

Introduction.

After explaining to us very well in his first class on what ICOs are, he followed it up with a good lecture on blockchain projects. In this class he has educated us on what crypto currency dominance is. This is my solution to the questions asked.

What is Cryptocurrency Dominance?

Cryptocurrency dominance refers to the total percentage of a coin or token in the total market capitalization in comparison to all the other various cryptocurrencies. One coin is set to dominate all the others when its percentage of the total market capitalization is the highest or exceeds all the others in the coin market. Currently, bitcoin is the most dominant cryptocurrency.

It has been the most dominant since its introduction in 2009 as it was the only cryptocurrency at that time. Although its dominance has reduced with the introduction of alt coins, it is still in the number one spot. The second dominant cryptocurrency is Ethereum followed by Binance Coin. Using steem as an example, its dominance at the time of working on this homework task was 0.01%

What is Bitcoin Dominance?

The term Bitcoin Dominance refers to how much of bitcoin is present in the total market capitalization of cryptocurrencies at a particular time. An example is when it was 100% dominant after it was first released as the only cryptocurrency. The bitcoin dominance is so influencial that it helps crypto traders to know if altcoin trends are upward or downward toward bitcoin.

When bitcoin dominance increases, altcoins lose value against BTC but when bitcoin dominnce decreases, altcoims gain value against BTC. This means if the price of BTC falls badly, the price of altcoins falls as well and if BTC rises significantly, the price of altcoins increase as well.

The current Bitcoin dominance at the time of performing this homework task was 40.88% .

source

Mention at least two times where the market had strong falls, mention several affected currencies.

Event 1

The first event I would be talking about is BTc's price drop in 13th of April 2021. BTC was at a high value of $57, 939 on 12th of April 2021. It then fell to a price of $46,980 on April 14th when tesla announced they had suspended its plans to accept BTC as payment for its vehicles.

The alt coin Ripple (XRP) also decreased significantly from $1.47 in April 12th 2021 to $1.42 in 14th April 2021.

[source](coin market cap)

Event 2

The next event I would be looking at is the price of ETH on May 2021. Ethereum had a major price fall in May 12th 2021 falling from a high value of $4362 to a low value of $3549 on 13th of April 2021.

[source](coin market cap)

Litecoin also suffered a significant price drop doing the period of 12th to 13th May 2021.
LTC started at a high value of #393.13 on 12th May and dropped to as low as $292.28 to a $100 reduction.

[source](coin market cap)

What is Altcoin Season?

Altcoin Season refers to when altcoin investors are dominant over bitcoin investors. Altcoin season is when altcoin begin to gain more ground and gradually become independent. This occurs when crypto currency investors take liking in altcoin and some even convert their bitcoins into altcoins.

This results in rise of altcoins when huge capital is pumped into them.

Altcoin season has been on the rise lately because of the decrease in bitcoin dominance. One notable example is Ethereum.

source

Give brief description of at least 2 altcoins that are in the TOP 50.

Ethereum
Ethereum is one of the altcoins that has seen a significant increase in its price recently. It was founded by Vitalik Buterin released on 30th July 2015. It was proposed in 2013, and funded through an ICO in 2014. Ethereum is ranked the second largest cryptocurrency according to coin market cap. Its a open source system giving its users freedom to take their decisions. Its a decentralized blockchain network that rums on smart contracts.

Ethereum was to be used to pay for transaction fees called GAS fees when using the Ethereum and other blockchain networks.
At the time of performing this homework task, ETC's market statistics are listed below.

ETH Price = $3,851.08

Trading Volume = $44,203,791,475.86

Volume/ Market Cap = 0.9915

Market dominance = 19.83%

Market Rank = #2

Fully Diluted Market Cap = $445,814,759,161

[source](coin market cap)

Litecoin (LTC)

Litecoin is an open source software released by Charlie Lee on 7th October 2011 under the MIT/X11. It was released just like the other altcoins as a successor to bitcoin. LTC runs on the scrypt blockchain network. Charlie Lee developed Scrypt in order to make custom built hardware hacks difficult. It is currently ranked 12th on coin market cap.

The block generation time of LTC is in 2.5 minutes as compared to BTC which has a generation time in 10 minutes. It has an 84 million coin limit.

At the time of writing this homework post, its market statistics are given below.

LTC Price = $313.28

Trading Volume = $5,689,185,080.60

Volume/ Market Cap = 0.2726

Market dominance = 0.92%

Market Rank = #12

Fully Diluted Market Cap = $26,262,727,560.11

[source](coin market cap)

Relevant news that has affected the price of cryptocurrency.

Its no surprise that news from the media especially from prominent people causes rise and fall of cryptocurrencies. Twitter is mostly the social media platform that causes the stir when such statements are made. A clear example is whenever Elon Musk tweets about cryptocurrencies. His statements are always analysed which causes talking points.
When news from amd other prominent people is positive, investors use that opportunity to buy the coins but when it is negative even to a small degree, some investors out of fear (FOMO ) tend to sell.

Below are examples of such relevant statements;

1. Elon Musk announces that Tesla has bought $1.5 billion in bitcoin and would be accepting it as payment

source

When news broke that Tesla bought $1.5 billion in bitcoins and had made provisions to start accepting it as payment, bitcoin's price increases significantly.
Because both Tesla and Elon Musk are reliable, people who were already looking to buy bitcoins made purchases. Bitcoin rose on February 8th to $46,203 from $38,903 on 7th February with Tesla's news.

1. Tesla will no longer be accepting bitcoin as payment

source

Elon Musk said in a tweet 2 days ago ( 13th May ) that Tesla has suspended vehicles purchases using bitcoin. This again as expected caused a significant dip in bitcoin price as it fell bh more than 10%.
Initially, BTC was at $57,939 on May 12 but fell to as low as $46,980 on May 13th 2021 after Elon Musk made the announcement.

1. Donald's Trump Tweet

source

Former US president Donald Trump made a statement criticizing bitcoin saying he was not a fan of cryptocurrencies. Bitcoin as the mother of all cryptos took the hit and fell to about 10%.

Safemoon

source

Penny cryptocurrencies are cryptocurrencies that have very small market price having a value less than 1%.
Safemoon ( Safely to the Moon) was founded by John Karony and launched in March 2021 and has already attracted about a million users. This currency favor's investors who hold their assets rather than sell. This is due to the fact that for those who sell their assets are charged a fee of 10% and 5% of those fees are given to holders of the coin.

Safemoon is believed to be a scam by some people since it has failed to make public its plans since its release. It runs on the ninance smart chain network.
It can be purchased on exchanges like Pancake Swap, Bakery Swap, Bitmart, Whitebit, etc.

As at the time of doing this homework post, its market statistics are;

Safemoon Price = $0.00000841

Trading Volume = $53,792,094

Volume/ Market Cap = 0.01093

Market dominance = 0.22%

Market Rank = #202

Fully Diluted Market Cap= $8,402,598,832

[source](coin market cap)

Conclusion.

I want to say a big thank you to to prof @imagen for this very informative lecture as I've learnt a lot. I learnt that cryptocurrencies are very good to invest in but they are not totally independent as statements from prominent people like Elon Musk can influence their price volatility.