Can Bitcoin Force Altcoins out? A Brief Analysis of the Current Situation

A bit about the historical profitability of BTC

On January 3, 2019, the Bitcoin network celebrated its first major anniversary, exactly 10 years ago the first so-called “genesis block” was generated, then the first 50 BTC was received. In its short history, BTC has managed to become the most highly profitable asset in the history of mankind.

Some statistics:

• On October 5, 2009, the Bitcoin exchange rate was $1 - 1309.03 BTC;
• On December 18, 2017, the cost of one coin was almost $20,000 and a historic maximum was registered. 

Armed with a calculator, you can easily assume that this asset showed incredible growth, which amounted to 26 180 751 times. These numbers can really turn your head and cause many people the so-called "loss of profit syndrome." Yes, of course, at the time of this writing, the BTC rate is approximately $10,500 per coin, which is still a huge profit for early investors.

Bitcoin dominance

According to Bitcoin Obituaries, Bitcoin has been “buried" 371 times in history (data on the site is constantly updated). But despite this, it still remains the unchanged leader of the entire cryptocurrency market, what cannot be said about altcoins, which, usually do not stay in the TOP-10 for long.

At the time of this writing, the dominance of bitcoin is 67.5%. For clarity, in December 2017 during the “cryptocurrency fever”, this indicator was at the level of 35%.

If the share of BTC increases, then the remaining cryptocurrencies attract less and less attention of investors. As a result, they either do not grow or fall. The trend is especially noticeable if you choose to display the value of coins in BTC.

The fact is that during the “cryptocurrency winter” of 2018, many overvalued altcoins left the market, which favourably affected the strengthening of BTC's positions. In addition, recently bitcoin has shown much better profitability in the dollar compared to most altcoins.

Representatives of a large venture capital firm Heisenberg Capital believe that the level of bitcoin dominance will only grow in the future. The company’s official microblog says the market has recently begun rejecting everything except BTC.

Reasons for Bitcoin Dominance

Some experts believe that Bitcoin takes the first place in the ranking because it is the first cryptocurrency to start the whole thing off. For the vast majority of people, Bitcoin is the main association with the word "cryptocurrency." All other coins appeared after the success of BTC. Indeed, some of them are much more technologically advanced than their “elder brother”, nevertheless they could not impress the wide audience so much.

Most experts believe that the secret to the success of the BTC is in its huge community, as well as the constant development of infrastructure.

Advantages of BTC over Altcoins

• The Bitcoin network has the largest number of miners, this automatically makes its blockchain the most secure in the world.
• If the seller of goods or services accepts digital coins as payment, then with a probability of 99.99% this is BTC.
  
• To invest in most altcoins, you will initially have to buy BTC.
  
• Often, the market follows the movement of bitcoin.
  

The fate of altcoins

As you already understood, recently an increasing amount of money has been flowing into BTC; against this background, other coins lose not only their value but, more importantly, their popularity. Because of this, developers have reduced interest in altcoins, which puts an end to their further development.

Let's take the latest examples:

• Bittrex exchange delisted Zclassic and MUSIC;
• The popular 2Miners mining pool removed coins such as Akroma and Musicoin from the list.
  

After that, the rates of the above coins rushed down, and investors lost their funds. Who is to blame? To some extent, developers, and to some extent, the market, well, someone just was not lucky due to a set of circumstances. The fact is in 2019, altcoins are slowly dying. As long as Bitcoin continues to pull a larger market share, there will be more and more such situations.

It is worth remarking that the purpose of this article is not to denigrate absolutely all altcoins since there are really worthy projects on the market that may possibly be widely recognized in the long term. We only state the fact that investing in altcoins in 2019 is not the most profitable idea.

In addition, we can recall the historical data that show us that the largest altcoins of 2013 (Namecoin, Peercoin and Feathercoin) are far outside the top-10, while Bitcoin has remained at the top of the cryptocurrency industry.

The trend of the TOP 10 cryptocurrencies in 3 months

Bitcoin

Over the past 90 days, Bitcoin has been a fairly volatile asset:

• minimum rate - $7500;
• the maximum rate is slightly more than $14,000;
  
• at the time of writing, one BTC costs about $9,800;
  
• if you bought Bitcoin 3 months ago, today you would be up 13.95% in the dollar.
  

Ethereum

Over the past 90 days, Ethereum has also been a very volatile asset:

• minimum rate - $180;
• maximum rate about $360;
  
• at the time of writing, one ETH costs about $180;
  
• if you bought ETH 3 months ago, today you would be down by 32.47% in the dollar.
  

Ripple

Over the past 90 days, XRP has also been a very volatile asset:

• minimum rate – $0,258;
• maximum rate about $0,499;
  
• at the time of writing, one XRP costs about $0,258;
  
• if you bought XRP 3 months ago, today you would be down by 41,33% in the dollar.
  

Other TOP-10 coins

This list can be continued endlessly, but the trend is very clear - in 2019, investments in altcoins bring only losses, while Bitcoin is rapidly conquering new heights.

Conclusion

At this point in time, amid the trade wars of the United States and China, large investors are seeking to hedge risks and protect their capital. The best applicants for this role are two assets: gold and Bitcoin. It is possible that after stabilization of the economic situation in the world, altcoins will also grow, but now it’s definitely the time for BTC.

Probably in the next 3-5 years, the global rating of cryptocurrencies will radically change, while it is highly likely Bitcoin will still be in its place. But it is important to understand that in this market everything is changing at a very fast pace, so no one knows 100% what will happen in the future.