Bitcoin Dominance Growing — What It Could Mean for Altcoins
Bitcoin (BTC) has more than tripled in 2019, moving from under $4,000 at the start of the year and then topping out at a little under $14,000 in June. In the earlier part of 2019, altcoins seemed to be performing strongly, with many calling the trend altseason.
However, since Bitcoin began its 2019 charge starting with the April Fools day rally, most altcoins seem to be slipping when compared to the top-ranked cryptocurrency. There is now a growing debate about whether the altcoin market will experience the same massive price gains seen in Bitcoin during this current bullish cycle. Within this expanding debate, there are several viewpoints. Some say Bitcoins dominance will continue to increase while altcoins continually lose ground. Others posit that previous cycles have seen altcoin rallies coming after bullish fatigue sets in for Bitcoin.
Bitcoin dominance chart as percentage of total market capitalization
Whether altseason returns or not, the only point for consonance appears to be the idea that the current bull cycle could have profound ramifications for the still infant market. Several commentators say cryptos are becoming a more mature asset class, which could lead to wider adoption.
Bitcoin vs. altcoins: The altcoin bubble argument
In late 2017, the cryptocurrency market arguably captured attention in the financial sector and beyond. Bitcoin rose to almost eclipse the $20,000 price mark while altcoins also posted all-time highs. The following year, many cryptocurrencies saw these gains virtually wiped out as the market endured a prolonged bear decline. The average price dip across the board was more than 80%.
Many analytical autopsies of the 2017 bull run converge at the conclusion that the sharp price gains were likely fuelled by hype-driven mania for cryptos as a new asset class. Retail investors struck with a fear of missing out (FOMO) rushed to put money into any and all crypto tokens in the hopes of becoming early backers of the next Bitcoin.
This FOMO-driven hype occasioned by the initial coin offering (ICO) boom also generated sufficient tailwind for Bitcoin to reach its all-time price high in mid-December 2017. ICO tokens generated a lot of buzz for the altcoin market as well. While the 2018 bear market did not discriminate in its wipeout of the 2017 price gains, the 2019 recovery hasnt been as widespread across the market. To get a clearer picture of the situation, consider the following comparison by Twitter user and cryptocurrency analyst StopAndDecrypt: