The bullish run of cryptocurrencies is not going to end anytime soon. Cryptocurrency investors often look to diversify their portfolio by seeking better options than bitcoin, famous as altcoins, but always invest in bitcoin again. Bitcoin tends to have a gigantic influence over the entire cryptocurrency market. Furthermore, if you are looking for a safe site to trade bitcoin, check out Bitcoin Buyer and sign up to start trading.
The market capitalization of bitcoin is always more significant than the combined market cap of other cryptocurrencies. Bitcoin is way ahead of the entire cryptocurrency market as it alone contributes 48% of the industry’s market cap. The total cryptocurrency market cap just passed the $2 trillion mark, which will continue to increase proportionately to factors like less regulatory environment, increased acceptance of crypto by enterprises, etc.
Why does bitcoin have such a significant influence? Let’s find out
– Bitcoin Achieves Market Share Dominance – It is undeniable that bitcoin dominates the entire cryptocurrency market in terms of market share. There are roughly 950 other cryptocurrencies available on the market today, but to an outside observer, it is apparent that bitcoin is the only cryptocurrency that matters. Nonetheless, despite its dominance in the market, many altcoins are correspondingly skyrocketing.
– Strict Regulatory Environment – Bitcoin’s legal status has been debated in many countries worldwide, including India, Japan, and Russia. However, most governments are firmly in favor of the Adoption of cryptocurrencies. Moreover, these legal certainties have made institutional investors invest in bitcoins.
– Large-Scale Investor Turnover – One of the most common aspects of all cryptocurrencies is large-scale investor turnover. The majority of the altcoins are created as proofs-of-concept and then abandoned. As a result, only a third of the cryptocurrency market cap is derived from cryptocurrencies that have experienced some community support. Still, people stopped supporting many famous altcoins to their aggressive and volatile nature.
– Majority of altcoins are a copy of bitcoin- All kinds of cryptocurrencies have fallen out of favor at various points in time since 2009. However, Bitcoin has survived all these phases due to its popularity and Adoption by almost all governments and businesses.
The cryptocurrency market will be subject to positive changes as more and more people start accepting cryptocurrencies irrespective of their price volatility. Bitcoin established the underlying technology of cryptocurrencies, and later on, altcoins were developed on top of it.
– Minimal Consumer Awareness – In most parts of the world, there is minimal knowledge about virtual currencies and their underlying technology. Several financial analysts strongly believe this situation will not change if retailers do not start accepting other cryptocurrencies.
Even if bitcoin has a considerable market share, various factors have led to the development of various cryptocurrencies and ICOs over time, which may be more beneficial than bitcoin in terms of scalability and speed. As a result, investors have started showing an inclination towards these digital coins, which have shown high growth in their value.
Bitcoin is way ahead of other cryptocurrencies
Bitcoin’s Adoption is at a peak
When Bitcoin was in its initial stage, it drew the attention of a few investors and founders of startups. However, at the beginning of 2017, the number of users reached to million, making Bitcoin the world’s fastest-growing network. In addition, El Salvador 2021 surprisingly became the country that officially acknowledged bitcoin as a legal currency. Forty-six countries have legalized bitcoin but have not officially declared it a legal tender.
Bitcoin is way ahead among various cryptocurrencies in market share, Adoption, usage, and other aspects. Therefore, there’s a positivity surrounding cryptocurrencies which eventually would lead to the broader Adoption of these digital currencies in the future. Moreover, the scope of bitcoin is not only limited to financial transactions but also has other applications in the real world.
Bitcoin’s market cap is as same as the entire cryptocurrency market
The overall market cap of all cryptocurrencies crossed $2 trillion on mark recently, and this will continue to increase proportionately to factors such as less regulatory environment, increased acceptance of cryptos by enterprises, etc. It is common to observe that most of the altcoins in the cryptocurrency market reflect the ideas and technology which were first implemented by bitcoin. Some of them are even designed to compete with Bitcoin.
Many investors have invested in these copy-paste projects based on their technical features, roadmap, etc. As a result, these digital coins have facilitated faster transactions than bitcoin but are facing challenging times given their volatility due to low liquidity and limited Adoption by enterprises.
Conclusion
It is undeniable that bitcoin dominates the entire cryptocurrency market regarding market share. However, despite its dominance in the market, many altcoins are correspondingly skyrocketing in market cap.
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