“With the growing legitimacy of cryptoactive assets, we are facing a certain shift in the investor paradigm. Bitcoin has long remained the preferred choice for institutional investors in particular, thanks to its developed investment infrastructure. However, over time, potential buyers are beginning to look at individual cryptocurrencies from the point of view of their real usability, “says Cyrrus economist Tomáš Pfeiler.
To date, investors from more than $ 68,000 in November have spent over $ 20,000 on each bitcoin. At the same time, the entire market fell much more slowly, losing “only” about 800 billion dollars from the $ 2.9 trillion in November, which represents the value of the crypt market.
Kryptoměna ethereum
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The fall of bitcoin has several reasons, one of which may be that the cryptocurrency is somewhat lost on other major coins from the perspective of its own evolution. “Newly created cryptocurrencies can offer more efficient operations or other benefits, making them more competitive, which in itself leads to increased investor interest,” emphasizes XTB analyst Jiří Tyleček.
However, the battle also takes place between bitcoin and its traditional “competitors”. Market experts mainly mention the ambition of etherea to become the market leader.
Thus, virtual coins, which are more usable for payments or offer the possibility of creating so-called smart contracts, get into the investors’ search engine. An example is ethereum or one of the fastest growing solan cryptocurrencies.
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“An increasing number of investors are buying stablecoins, cryptocurrencies linked to other assets such as the dollar,” Pfeiler said.
The view of the tandem of today’s most important cryptocurrencies thus shifts. “While bitcoin dominance is declining, in the case of etherea it is increasing. This is crucial in that investors and speculators may see ethereum as a coin with greater growth potential in the future, ”says Techstory analyst Reshab Agarwal. According to him, the relative decline in the weight of bitcoin, in addition to etherea, also speaks for the growth of less popular currencies. “We could look forward to the altcoin season in the first quarter of next year,” he adds.
The extreme arrival of new coins also plays a role. Their offer is still growing, according to Coinmarketcap statistics, there are around fifteen thousand virtual coins on the markets. A year ago, their number was about half. Newly created and lesser-known coins often attract huge profits in a very short time.
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“When the number of new cryptocurrencies to which money is allocated grows sharply, it naturally means pressure on the market share of the older ones, led by bitcoin,” recalls J&T Banka economist Pavel Ryska. According to him, at the same time, investors stopped being afraid to diversify across coins.
“In the early days of the crypt market, bitcoin was an absolute symbol of cryptocurrencies, and new investors directed their funds primarily to it. Over time, investors look more at the characteristics of individual currencies and the growing liquidity of the market allows them to have a larger position in altcoins, “adds Ryska.
The importance of bitcoin reached a similarly low level, for example, in May this year, after which the share of bitcoins in the cryptworld increased slightly. However, bitcoin last had more than half the market share during April this year. At the end of last year, the most famous cryptocurrency accounted for about 70 percent of the value of all coins. Bitcoin had the lowest weight at the beginning of 2018, around 31 percent of the market, whose size in the order of hundreds of millions of dollars was, however, marginal from today’s point of view.
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