3 Reasons Why Bitcoin Is Gaining Against Altcoins

At one point early this year, Bitcoin fell to as low as 32% of the total cryptocurrency market share (known as BTC dominance). Thanks to the recent upwards trend, Bitcoin now stands at a more typical 47% dominance. The price of Bitcoin, while down from this year’s all-time highs, is more than double what it was exactly one year ago today. This is all happening against the backdrop of a sliding altcoin market. There’s a good reason why Bitcoin is stronger than altcoins at the moment. Here are three main factors causing Bitcoin to gain against the rest of the field.

Bitcoin: The Gateway Cryptocurrency

Don’t let the pundits fool you. Prices may be down since the beginning of the year, but interest in cryptocurrency investing is as hot as ever. From lone traders to institutional investors, all eyes are on the market. As money comes back into the market, Bitcoin is the staple coin and must be used to buy other coins. Bitcoin is the key to accessing the wonderful world of alts-trading, and it’s usually the key for when investors want to cash out to fiat as well.

Bitcoin ETF on the Horizon?

In recent months we’ve seen numerous applications for a Bitcoin ETF get denied by the SEC, but industry experts still expect the first one to be approved soon. A traditional ETF, or Exchange Traded Fund, allows everyday people to invest in a professionally managed group of stocks, much like a mutual fund. This has the benefit of lowering risk and diversifying your portfolio. A Bitcoin ETF would work much the same way, albeit with cryptocurrencies instead of stocks. This would be a boon for the industry, as it would open the floodgates to big institutional investors who require the regulation and security when making investments.

As well as enticing new buyers, even the hint of a Bitcoin ETF marching towards approval creates more passionate Hodlers. These are crypto-investors who “hold” their portfolio, as opposed to actively trading, in the hopes that the price will keep going up and they can eventually cash-out. A Bitcoin ETF approval would certainly drive the price up, giving hope to the Hodlers of the world after a dismal start to the year.

Cycle, Rinse, Repeat

All markets are cyclical, and we sometimes see Bitcoin quickly go through a cycle that other financial markets would take months or years to complete. As people see the price of BTC rise, FOMO dominates and more money comes in, which causes the price to increase further. This inevitably leads to a sharp decline, where the same FOMO investors panic-sell on the way down. When the price gets near the bottom, people start snatching up BTC again in the hopes that the tides are turning. Each time the market goes through this cycle, the average price tends to be higher and higher (long-term trend), causing investors to flock to Bitcoin over its altcoin alternatives.

There’s a reason that we separate the market into Bitcoin and everything else. It was the first cryptocurrency, and it retains its strength by being the key to accessing other coins on the various exchanges. It’s impossible to know if we’ll see BTC dominance go higher or lower in the coming months, but there’s every possibility that it will continue its recent strong performance against the altcoin field. Learn more about BTC trends at our online trading room, Bulls on Crypto Street.

This is a Contributor Post. Opinions expressed here are opinions of the Contributor. Influencive does not endorse or review brands mentioned; does not and cannot investigate relationships with brands, products, and people mentioned and is up to the Contributor to disclose. Contributors, amongst other accounts and articles may be professional fee-based.

Tagged with: