News Bitcoin's Growing Dominance Is a Problem

Bitcoin’s Growing Dominance Is a Problem

-

- Advertisment -

By Gaurav S. Iyer, IFC Published : March 27, 2018

 eth price forecast 27 march
iStock.com/juststock

Ethereum News Update

As Ethereum prices continue to fall—alongside the rest of the market, I might add—investors are concentrating their funds in Bitcoin, otherwise known as digital gold.

Bitcoin has drawn these comparisons for much of its history, though the reasons have evolved with time.

At first, investors argued that Bitcoin’s fixed supply mirrored the real-life limitations of gold deposits. Now, however, investors point to the use of gold as a safe-haven asset, arguing that Bitcoin serves the same purpose in cryptocurrency markets.

There’s even a metric to reveal the market’s concentration in Bitcoin. It’s known as BTC Dominance.

Like with anything else, BTC Dominance is a function of the market. It morphs over time as the cryptocurrency market goes through its extreme business cycles, reaching near 30% during long stretches of calm, and soaring above 50% when crisis arrives.

Right now, it is surging…

Bitcoin’s share of the total has increased from 39.5% to 45%. This increase took place at the same time money flowed out of the cryptocurrency market, meaning that in order for that money to re-enter the market, it will have to pass through Bitcoin again (because you can’t buy most coins directly from fiat currency).

This suggests that the disparity between Bitcoin and its peers is starker than we previously thought. Investors are trapped in a vicious circle.

There is one potential silver lining in that Ethereum’s market share fell by almost the same amount that small altcoins’ market share rose. If we’re reading this correctly, it means that some investors fled, not to Bitcoin, but to the lower-tier altcoins market.

eth-price-chart-for-27-mar

Analyst Take

Times of crisis usually serve Bitcoin prices. Whether I think it’s rational or not, the “digital gold” narrative is a deeply embedded cryptocurrency culture.

I mean, yes, it’s possible that a contingent of smart money is waiting out the storm in altcoins. But would I bet my life savings on that proposition? Probably not. At least not on the scant evidence we currently have.

Instead, I’d wait for the relative safety of larger cryptos. If our $1,500 Ethereum price forecast is anything close to accurate—as many of our previous forecasts have been—then we’re still talking about triple-digit upside.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came under new ownership in December 2019. Since taking over the exchange,...

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when dealing with a decentralized and anonymous currency, but does bitcoin...

Crypto can’t thrive in the real world – but stablecoins can

We can safely say that the hype about cryptocurrencies is pretty much over. The claims of Bitcoin...

How to double your crypto

Most of us have a small gambler deep inside our souls. We love to feel the thrill...
- Advertisement -Bitcoin's Growing Dominance Is a Problem

Cryptocurrency Top Security Risk Concerns: What You Can Do to Protect Your Crypto

A report by CipherTrace revealed that in the first half of 2019, criminals and fraudsters stole more...

How has Bitcoin of America Changed the Cryptocurrency Industry?

Who is Bitcoin of America? Bitcoin of America is a U.S. based digital currency...

Must read

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came...

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when...
- Advertisement -Bitcoin's Growing Dominance Is a ProblemBitcoin's Growing Dominance Is a Problem

You might also likeRELATED
Recommended to you