Bitcoin now accounts for less than half the market cap of all Cryptocurrencies
For the first time ever, Bitcoin's stranglehold on the cryptocurrency market cap has shrank below the 50% threshold.
This is very big news considering Bitcoin has accounted for more than 90% of the total cryptocurrency market cap for many years. It is even bigger news when you take into account that Bitcoin has also been increasing in value during this time period when it's losing market cap share.
So, Bitcoin is not losing it's stranglehold on market cap because it's losing value, it's losing it's stranglehold because everyone else is gaining in value at a faster pace.
Which means the Pie is growing big time!
Here is a chart showing Bitcoin's percentage of cryptocurrency total market cap:
Why is Bitcoin losing it's grip on the space?
1. Ethereum is rising quickly - For a while now Ethereum has had the second largest market cap in the space. However, that hold was in the single digits. Recently after a parabolic move took the coin from single dollars to almost $100 a coin, it's market cap share has inched up close to 20%.
2. Speculation in the space is driving up prices - It is impossible to throw a stick without hitting a cryptocurrency that is up 100's of percent in the last couple months. The entire space has been on fire. Many speculators, fearing they already missed the move in Bitcoin, are flocking to altcoins hoping some of them can repeat Bitcon's price performance.
3. New ICO's are coming online daily - As the popularity and interest in the space has increased, so have ICO's. Something like $380 million has been raised recently through ICO's and that number is only looking like it is going to increase. More and more money is entering the space and finding a place to go besides Bitcoin.
4. Bitcoin's development has slowed - Compared to many of the newer altcoins, Bitcoin is a bit of a dinosaur. It was the first in the space, but it's technology is lagging. Transaction fees have gone from $.11 to $1.70 in the last year. The time to confirm a transaction is over 20 minutes at this point. Compared to steem, which has no transaction fees and processes transactions in under 3 seconds, it's technology looks ancient...
5. Newer projects offer more than just a currency - A lot of these newer projects are offering technology that is more than just a currency. As these new technologies enter the space they are bound to increase the overall money involved in the space and continue to narrow bitcoin's dominance of it.
Conclusions:
All of this doesn't mean that Bitcoin can't keep going up, it probably will. It just means that Bitcoin's days of dominating the space are likely over.
Lots of new money is coming into the space and likely will continue to do so and that is great news for anyone involved in other blockchain projects, such as steem.
Steem on my friends!
Sources:
Image Sources:
http://www.coindesk.com/the-dao-bitcoin-development/
Follow me: @jrcornel
Thank for sharing! I am interested to find out your thoughts on whether we are in a cryptocurrencies bubble now? Here is the DATA which support this my assumption: it looks that we are entering bubble territory for a vast majority of alt coins (except Bitcoin probably). Just think about and analyze the following facts:
At least several dozens alt coins market caps skyrocketed 300%-4000%(yes, four thousand!) recently just over last 2 months!
The beginning of sharp increase happened around middle of March of 2017 for ALL alt coins!
Yes, some alt coins sharp increase is logically justifiable. For example, Ripple XRP: http://www.cnbc.com/2017/03/01/japanese-banks-plan-to-adopt-blockchain-for-payments.html . Maybe there are couple other alt coins where this huge growth is also justifiable.
But for vast majority of other alt coins nothing has changed drastically during the last 2 months! At all! Neither in their technologies development, nor in their business development! But nevertheless, their market cap skyrocketed 300%-4000% in just 2 months!
The only explanation which comes to mind is that huge amount of new capital is coming to cryptocurrencies market. Probably these are the people/investors who have heard about the first wave of Bitcoin and Ethereum successes, and they have a FOMO (fear of missing out) now. They don't have deep understanding of cryptocurrencies space and their differences, but because of FOMO they still invest in all other alt coins hoping to hit jackpot!
Does it remind you anything? Yes, exactly, dot com bubble of 2000 looks very similar!
Therefore, I would expect some kind of significant downside price correction within next several months for the majority of alt coins. Would you agree?
I would agree with most of this except for your timing prediction... This could last a heck of a lot longer than a couple months. The dot.com bubble you referenced lasted for the better part of 5 years. This looks more like the beginnings of something than the top of it, but that is just my gut feeling. I think we could see prices go a lot higher before we see a huge crash.
On Steam this will also have negatively affect too?
Perhaps. However, steem has an entire social networking site behind it that is just getting starting. Hopefully steem has many use cases besides just as a currency. If that is the case it should have many factors helping support it when times get lean.
I am not sure about steem. If, for example steem.com has exponential users growth and therefore exponential steem adoption, then it might not crush and its growth rate is justifiable. But if, users growth is just linear but steem price is exponential, then we are going to see a correction. Steem.com owners have much better picture than we do.
Good point. But crypro market is different from stock market as well. Main difference is amount of capital invested in those markets. Crypto market is tiny compared with stocks market. If you look back at Bitcoin bubble in the end of 2013 (Bitcoin was around $1K at that time), then you will see that it crushed just within 1 year to around $200 for Bitcoin (80% drop). I would expect similar timing for many alt coins bubble burst.
Yes the markets are different sizes and things move a lot faster now than they did in the late 90's. However I still stick with my premise that this is more of a shift than just a flash in the pan bubble. Time will tell I guess.
@alex13, drawing parallels with the dotcom bubble is easy but we need to understand why there was a dotcom bubble in the first place. Huge money went into dotcom startups in 2001 but the real problem was the penetration and the lack of monetization. So it was only a certain distance that you could go with the cash burn strategy.
Cryptocurrencies and the blockchain technology tied up with them has a solid business case for making hassle free transactions, cost savings, elimination of intermediaries. The market participants (similar to user penetration and acceptance) amount into billions and possibly means trillions of transactions. And we are talking Global here. The basic business case of it is very solid here and all the altcoins and the blockchain technology are addressing problems in very existent market, and solving real pain points. So while bitcoin is consumer to consumer, consumer to business and business to business, Ethereum is making it's presence felt with it's smart contracts based distribution ledger. Ripple has taken it to a very different level with addressing the pain points of the inter-bank and cross border global settlements and payments. The adoptions are increasing, and so will the value of these cryptocurrencies. I don't rule out huge volatility in the short term, but if you are good with a long-term play, this is the legal tender of the future.
Maybe you can read my article as well and let me know your thoughts - https://steemit.com/cryptocurrency/@knowledgesausage/can-xrp-ripple-be-your-ticket-to-milliondom
To me, too, this seemed unfounded, but I did not conduct such an in-depth analysis as you
Thank @alex13!
You are welcome!
I agree with you, as I wrote in my remark.
Bitcoin is NOT in a bubble now.
The criteria for a bubble is easy explained by Greg @marketreport in this his short post.
https://steemit.com/bitcoin/@marketreport/are-you-waiting-for-the-bitcoin-bubble-to-burst-don-t-hold-your-breath-by-gregory-mannarino
it's good for rising bitcoin. We expect Bitcoin price will hit $10K very soon.
Yea it is impressive that Bitcoin is losing it's dominance while also increasing in value. That just goes to show how much money is pouring into this space right now...
And I suspect the current hike of ripple, ethereum, steller lumens & even Dogecoin etc. (which coins circulation is vast) is artificial. They are being pumped by Poloniex's inside job. I just doubted it.
You think so? Why do you think that?
Ok ... I'll make a post to explain my vision. Something seems to me very fishy ....
I agree. There has been a lot of fishy outages with Poloniex at very opportune times (for them)... I was just wondering if you had anything specific. Link me to your post when you make it, I want to read it. :)
ok.sure:)
me too :)
What a time to be alive!
This could indicate that it would be wise to diversify investments across multiple cryptocurrencies and go long.
Yep. I would agree with that.
I trust in ETH, I'm a programmer and I can understand application and develop, but I think Ripple is the real power. Banks are interested about...
Fascinating stuff. Still plenty to play for, and no point getting FOMO about BTC when there are others with huge potential.
Yep, I agree. Much of the recent buying has come from Asia. As the rest of the world starts to adopt these types of currencies more I would expect to the see the prices of these things continue to rise...
In terms of percentage, I imagine some of the cheaper coins like Litecoin could reap more rewards in the long term. But who knows?
Yes, in terms of percentage gains, the lower priced coins have really outperformed the higher priced coins. That is kind of what happens when things get really low priced... it doesn't take as much money to move them.
That doesn't hold true for Ethereum though, as it was already priced in the dollars and had a nice large market cap. Lot of businesses involved with that one though...
Thanks for that. I really wish I knew more about this stuff so could invest better, not that I have much to invest!
I think it's normal that the alts are growing. The only thing I don't like is the growing marketcap of ripple. However I believe it won't get far because it's against everything we stand for as a community.
i think bitcoin is future coin
Good post
Thanks!
That Bitcoin is crazy, it will rule the world someday :)
Thanks for posting this awesome article, jrcornel! Upvoted this post.
Thank you! And yes it just might... :)
"that is great news for anyone involved in other blockchain projects, such as steem."
Glad you mentioned that. Steem should be in the Top 5 Cryptos.
It is right now on Poloniex ;) But yes it should be in top 5 for total market cap as well!
:) yes...hope it happens sooner than we expect.
Haha me too :)