Bitcoin Dominance Drops Near 50% Boom on the Way?
There’s a buzz in the cryptosphere today. Bitcoin dominance hasn’t been this low since last August. Google trends show that interest in Bitcoin hasn’t been this low since last April.
Are we in the quiet before the storm or status quo? Dominance is hovering just above 50%.
A result of “alt season,” money rapidly flowing into altcoins and a relatively stagnant Bitcoin price conspire to lower the actual position of Bitcoin.
But not by much.
Bitcoin’s market capitalization can still fit hundreds of other cryptos within it.
THIS ISN’T 2015 OR 2017 THE MARKET IS FAR MORE CROWDED Some in the space have noted that a lower dominance preceded a major bull run in the past.
Others have noted that the rise and fall of Bitcoin very nearly charts with the first major bull run, in which Bitcoin soared to $1,000 and then dumped below $100.
One thing left out of that analysis is the petulant effect of Mt. Gox. It’s reasonable to blame the first major crash on the failure of Mt.
Gox. Being the major Bitcoin exchange, its collapse scared investors.
Subtract that, and it’s unclear whether the crash would have happened at all. In the last bull run, however, we don’t have things like that.
There’s no single catalyst that can be blamed for the sell-offs. Interest began to wane.
Double digit percentage drops pushed new investors to dump. There is no data to suggest that such investors will come back.
WHERE WILL THE MONEY COME FROM THIS TIME? In one respect, it’s a sign of virtue that Bitcoin scares away those wealth seekers.
It’s difficult to stay invested in the space unless you have a philosophical distrust of the fiat system as part of your core principals.
The bull run up to $20,000 was one of the few price movements that got some long-term hodlers to move their funds. Some have reportedly bought back in at lower prices.
The average daily price of Bitcoin is largely dictated by less than half of the coin supply.
We can be sure that there’s not going to be a “Bitcoin killer” in the near future.
But a slow death for Bitcoin is less than impossible.
Over the past few months, it’s taken a lot of work to make any money on a Bitcoin investment.
You have to be very careful and reasonably equipped to time your buys and sells.
If you’d had the same money in Litecoin, you’d be flush right about now.
THE TOKENIZED ECONOMY WON’T BUILD ON BITCOIN At the same time, smart contract platforms continually gain additional value.
Real investment products are popping up all over the place.
Did you know, for example, that you can buy Dai and earn interest on it with the Compound protocol? You don’t even have to lock your Ether up in a CDP, as Dai is currently quite plentiful on regular markets.
The actual value of Ethereum, if you count everything that runs on it, is higher than $14 billion.
505 Ethereum tokens have a market capitalization higher than $1 million.
Many of these tokens, like Bitcoin and Ethereum themselves, have been 80 or even 2 500% higher than their current valuations.
New projects launch all the time, and the tokenized economy largely makes its home on Ethereum. Demand for Ether during the bull run can be largely attributed to people wanting to buy and hold these types of assets. However, Ethereum’s long term dominance as the world’s computer is questionable as well.
One can imagine a thriving market with multiple platforms.
After all, it’s not what blockchain you use, but what you do with it.
Tron and EOS are seeing incredible usage, and not for lack of trying on the part of Ethereum entrepreneurs.
Are we in the quiet before the storm or status quo? Dominance is hovering just above 50%.
A result of “alt season,” money rapidly flowing into altcoins and a relatively stagnant Bitcoin price conspire to lower the actual position of Bitcoin.
But not by much.
Bitcoin’s market capitalization can still fit hundreds of other cryptos within it.
THIS ISN’T 2015 OR 2017 THE MARKET IS FAR MORE CROWDED Some in the space have noted that a lower dominance preceded a major bull run in the past.
Others have noted that the rise and fall of Bitcoin very nearly charts with the first major bull run, in which Bitcoin soared to $1,000 and then dumped below $100.
One thing left out of that analysis is the petulant effect of Mt. Gox. It’s reasonable to blame the first major crash on the failure of Mt.
Gox. Being the major Bitcoin exchange, its collapse scared investors.
Subtract that, and it’s unclear whether the crash would have happened at all. In the last bull run, however, we don’t have things like that.
There’s no single catalyst that can be blamed for the sell-offs. Interest began to wane.
Double digit percentage drops pushed new investors to dump. There is no data to suggest that such investors will come back.
WHERE WILL THE MONEY COME FROM THIS TIME? In one respect, it’s a sign of virtue that Bitcoin scares away those wealth seekers.
It’s difficult to stay invested in the space unless you have a philosophical distrust of the fiat system as part of your core principals.
The bull run up to $20,000 was one of the few price movements that got some long-term hodlers to move their funds. Some have reportedly bought back in at lower prices.
The average daily price of Bitcoin is largely dictated by less than half of the coin supply.
We can be sure that there’s not going to be a “Bitcoin killer” in the near future.
But a slow death for Bitcoin is less than impossible.
Over the past few months, it’s taken a lot of work to make any money on a Bitcoin investment.
You have to be very careful and reasonably equipped to time your buys and sells.
If you’d had the same money in Litecoin, you’d be flush right about now.
THE TOKENIZED ECONOMY WON’T BUILD ON BITCOIN At the same time, smart contract platforms continually gain additional value.
Real investment products are popping up all over the place.
Did you know, for example, that you can buy Dai and earn interest on it with the Compound protocol? You don’t even have to lock your Ether up in a CDP, as Dai is currently quite plentiful on regular markets.
The actual value of Ethereum, if you count everything that runs on it, is higher than $14 billion.
505 Ethereum tokens have a market capitalization higher than $1 million.
Many of these tokens, like Bitcoin and Ethereum themselves, have been 80 or even 2 500% higher than their current valuations.
New projects launch all the time, and the tokenized economy largely makes its home on Ethereum. Demand for Ether during the bull run can be largely attributed to people wanting to buy and hold these types of assets. However, Ethereum’s long term dominance as the world’s computer is questionable as well.
One can imagine a thriving market with multiple platforms.
After all, it’s not what blockchain you use, but what you do with it.
Tron and EOS are seeing incredible usage, and not for lack of trying on the part of Ethereum entrepreneurs.
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