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Bitcoin (BTC), Cryptocurrency-Despite the bearish market of 2018, which saw the cryptocurrency prices generally fall by more than 90 percent, there was a general increase in interest for the altcoins compared to that of the original cryptocurrency, Bitcoin.
While BTC still holds the highest position in market capitalization with a large margin ($ 51 billion compared to second-placed ETHs at the time of writing), Bitcoin dominance has been declining over the last six months. In January 2017, BTC's domain was close to its peak with more than 85% of the entire market share. A year later, following the boom in the price of cryptogens in the early days of 2018, BTC's domination had dropped 38%, with many analysts currently predicting a flippening on the horizon. Instead, the entire market has plummeted, with the rises that have plummeted in falling prices and Bitcoin has slowly gained market share throughout the year.
However, the last four months have witnessed a return to the erosion of BTC's influence on the market, as investors and developers are looking for projects that will reinvigorate the interest in cryptocurrency.
According to the research published On January 11th by the Federal Reserve Bank of St. Louis, the increase in altcoins competing for development and market interest had a significant impact on Bitcoin's valuation. The relationship divides the outlook for the industry into two dominant perspectives, both on two fronts opposed to the future evaluation of Bitcoin. For the bulls, their belief lies in the limited supply and the deflationary nature of BTC, with the idea that Bitcoin will inevitably be appreciated in the long run with the increase in demand over the offer in decrease. The bears, on the other hand, believe that BTC has risen to a niche market interest, and is now set to slowly shrink to zero.
The report admitted a much more realistic position, stating that the future of BTC is probably between "mooning" and becoming completely useless,
"We think that the future price path is more likely to remain limited between these two extremes".
However, most of the research focuses on how the growing altcoin market in 2017 and 2018 has affected the price of Bitcoin, with the final conclusion that the potential assessment of BTC has indeed been hampered. Compared to bullish investors on Bitcoin, who believe that the dominance of the currency market will continue and therefore will increase the price of BTC with a general growth of the market, the St. Louis group reports a different narrative.
Rather than continue to rise in comparison to the market, the increase in the supply and valuation of altcoins has curbed the price and the market capitalization of Bitcoin, imposing a general limit on its growth,
"While the price of Bitcoin will probably not fall to zero, the prospect of a flooding of Altcoin competing with Bitcoin in investors' wealth portfolios is likely to put significant downward pressure on the purchasing power of all. cryptocurrencies, including Bitcoin ".
The report seems to indicate that cryptographic markets are experiencing a limited amount of investment capital, with a distribution that does not favor Bitcoin over all other activities. Investors who are hoping for a breakthrough in the bearish cryptocurrency market would make the biggest gain for Bitcoin may want to consider the possibility of a more diversified portfolio, or at least consider the altcoin market as a major player ahead of what BTC has already managed to accomplish in terms of evaluation.
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