Bitcoin value is falling

by Ana Farr, Community Manager at ecommerce-platforms.com and Unblock.net. She is a matcha and mindfulness enthusiast and loves to chat about the implications of Blockchain technology.

The rise and fall of cryptocurrencies is an interesting topic because no one is sure where these digital assets are headed. Investors and promoters feel that the biggest bull run is yet to come (even when the signs lean far from that notion). Detractors, on the other hand, are still convinced that cryptocurrencies are nothing short of the Dotcom craze and just another bubble.

Irrespective of whether Bitcoin and its family members are a bubble or not, one thing is clear; they haven’t made investors happy in 2018-especially those who bought in during 2017.

As cryptocurrencies grew in number, many people realized that altcoins (alternative coins) like Ethereum, Monero, Dash, Ripple, Litecoin and others exuded more potential than most cryptocurrencies. Indeed, most of the top 30 cryptocurrencies are altcoins with billions in market cap.

At one time, crypto fans became almost sure that altcoins might uproot bitcoin from its top position due to their widespread fame and adoration. But alas, altcoins are falling way faster than Bitcoin. Even the second-best currency (Ethereum), with plenty of practical uses, is not showing signs of toppling Bitcoin from the top spot.

Most crypto projects, except Bitcoin, have shed almost half of their profits and are back where they were before 2017’s massive bull run. Bitcoin may have lost 70% of its value since its ATH of $20,000, but unlike the rest, its price is still way high than it was at the beginning of 2017.

Why altcoins are falling at a faster speed than bitcoin

First off, altcoins and other cryptocurrencies move in a similar fashion to bitcoin. When it falls, the rest tumbles as well. When it starts to recoup the losses, other crypto projects start to bloom too. A very strange trend, I’d say.

SEC’s refusal to approve Bitcoin ETFs

SEC recently denied all the Bitcoin-backed ETF proposals from various parties due to concerns about the manipulation of markets. While the decision should have affected only bitcoin, (which by the way dropped from around $6400 to $6200), the smaller cryptocurrencies felt the heat as well. Ethereum sunk to below $300 thereby registering the new lowest prices of the year. Currently, it sits below $220.

By commanding more than a half of the total crypto market cap, Bitcoin has been able to survive the scathing effects of SECs damning news. This shows that bitcoin is more stable than most cryptocurrencies. And that ladies and gentlemen, is one of the reasons why many shrewd investors are swapping their poorly performing altcoins for bitcoin leaving them worst off.

Geopolitical concerns
Geopolitical concerns could be another reason why bitcoin is able to show a better performance than other altcoins.
Take the ongoing civil unrest in Turkey, for example. The country’s currency, Turkish Lira, has dipped in value and many people have turned to bitcoin to protect their assets from inflation. Turkey is merely one of the sample cases. There are many countries with either economic crisis or strict sanctions that make people look for alternative ways to store their money. If this goes on, BTC could end up becoming the primary currency for many countries.

While altcoins can create a haven in times of excessive capital control and government crackdown, bitcoin is the first option for many people. In most places, those who are not well-versed with the crypto world understand cryptocurrency as another name to bitcoin and not an umbrella term.

Bitcoin boasts of a mature community
Bitcoin has plummeted a lot, but only serious investors can shell out $3000(for a half BTC) or over $6,000 for the entire coin. Therefore most of the investors interested in bitcoin do so out of long-term expectations. Some altcoins are much cheaper, and virtually anyone can afford them. Now, when the market takes a serious dive, the altcoin community gets more shaken, and novice investors who were looking quick bucks sell off their stock to avoid further losses.

Bitcoin community is a large network of real entrepreneurs who are not only looking for value but are concerned with how to make the platform better through the creation of new and better services. Altcoin community, on the other hand, could feature pretenders, “shillers” and pump and dump artists whose main objective is to make a return.

Most altcoins are considered knockoffs
Serious investors with a good understanding of the cryptocurrency history get skittish when you mention or advertise altcoins to them. Why? Because they consider them as knockoffs that were created by deceptive individuals in an effort to duplicate Nakamoto’s success. That’s right. By the end of 2017, there we approximately 1000+ cryptocurrencies. As of this moment, there are over 2000 crypto projects.

What problems are the new entrants seeking to solve that the previous 1000+ cannot? There is a lot of copy-pasting happening within the cryptosphere where folks are creating the same projects and adding a few features to the source code and giving them new names. From a financial point of view, there is no value in doing that. Serious investors can see the true value and potential of bitcoin, and they will keep dodging some of the altcoins with little to no value till kingdom come ( or if crypto bubble happens).

Redditors too don’t see any altcoin toppling BTC from the top position any time soon. In fact, others think many smaller cryptocurrencies may sink into oblivion leaving Bitcoin as the remaining cryptocurrency. This has led to a majority of them selling their altcoins for Bitcoin thus increasing BTC’s dominance while devaluing alternative coins.

Despite all the reasons given as to why altcoins are dwindling faster than bitcoin, we need to understand one thing; Bitcoin’s success has been relative. This cryptocurrency is struggling just like the rest, and if things don’t change soon, it will share the same fate as others.