Bitcoin's Increasing Dominance (And SHRINKING Market Cap!)
Anyone who follows the price of Bitcoin can see the obvious trend that has been in place lately. There is no doubt that Bitcoin has been in serious decline since the all-time highs (ATH) back in mid-December, 2017. Almost on a daily basis I have friends that are asking me "What's going on with the price?" with concerned looks on their faces. I assure them that this is all part of the plan and that patience is a virtue- but I too have my internal doubts and fears simply because I am HUMAN.
If we knew exactly what was going to happen with the price then we would all be millionaires I tell them! Then I remind them that the price of Bitcoin just one year ago was around $1,000 so even at a 60% loss from the ATH we are still up more than 700%. It doesn't feel like we are still up, especially if you got into the market late like many people did, but rest assured that Bitcoin is still alive and well. The market makers and takers wage daily battle and the HODLers are just sitting on the sidelines watching and cringing.
No pain no gain.
We often heard this phrase while growing up and it seems to be the perfect fit for crypto-markets. Well, except for the fact that we saw MASSIVE gains first, with minimal pain- so we knew it would be coming sooner or later. There are many contributing factors and I can't get into all of them but the list goes on and on. Market manipulation due to low liquidity, insider trading, alleged Tether pumps, mass media hype from nearly every news outlet and social media website, not to mention irrational exuberance and sheer greed.
We were overdue for a correction!
So this brings me back to the title of this post... Bitcoin's dominance has slowly been on the rise over the past month or so as the market cap has been completely sucked dry. What does this mean? Well firstly you can conclude that people are selling many of their alt-coins and possibly exiting the market out of fear, doubt or impatience. This would then push money back into Bitcoin, which increases the market cap and dominance. Some people will cash out that BTC back into fiat or to Tether and as they begin to do so the whole market has seen a cascading effect on the prices.
As BTC continues to fall in USD valuation, every alt-coin follows since many of them ONLY trade for Bitcoin and this has a compounding effect on the market cap valuations. Since Bitcoin is the gold standard for cryptocurrencies it is the measure by which all alt-coins have to stand up to- BTC goes down and the ENTIRE market shrinks. Thus the market cap is not a true measure of value, just one of the tools we can use to judge the flow of money.
Now what does this all mean?!
First and foremost Bitcoin is here to stay. The future of FinTech is extremely bright as more and more companies integrate the technologies. The price of Bitcoin is negligible for the most part, and a decrease can actually be beneficial to the utility of the coin itself- lower fees, faster transaction times and not to mention increased attainability due to low cost. Bitcoin needed to dispel all of the hype in order to continue its journey towards greatness. At the end of the day Bitcoin still provides the same function: peer-to-peer permission-less value transfer
Can Bitcoin continue to fall? Where is the bottom?
These are the million dollar questions. Bitcoin could definitely continue to fall further however the profit parity (the point at which BTC becomes unprofitable to mine) is somewhere just north of $8,000 according to a recent study. Depending on where the mining is being done and how much electricity costs, the price to mine each Bitcoin can vary from as low as a few thousand dollars in China to over $10K in South Korea. This huge disparity in mining costs from country to country and even region to region has lead to a virtual monopoly in Bitcoin mining so it will be interesting to see how this all plays out. The larger and more established mining companies will be able to engage in this war of attrition which may put their smaller, less resilient competition out of business sooner or later.
Many say that we have already seen the bottom, which was near $6,000, and other are calling for lower lows. All I know is that regardless of how LOW we end up going, the price will inevitably shatter those all-time highs of $20,000 so we have nothing to fear in the long term :)!
Check Out My Last Bitcoin Post:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-price-mini-t-a-3-18-2018
Feeling Salty About Missing The Crypto Boat?
https://steemit.com/bitcoin/@hotsauceislethal/how-to-conquer-fomo-fear-of-missing-out
Don't Worry:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-s-hype-cycle-is-finally-here
Fantastic Documentary About Relevant STUFF! (MUST WATCH!!!)
https://steemit.com/cryptocurrency/@avii/mind-over-money-documentary
Like Bitcoin But Want To Avoid The Fees?
https://steemit.com/bitcoin/@hotsauceislethal/save-money-when-sending-crypto
Pay No Transaction Fee From Coinbase!!!
https://steemit.com/bitcoin/@hotsauceislethal/no-transaction-fee-bitcoin-trick-using-coinbase
Need A Good Laugh?
https://steemit.com/bitcoin/@hotsauceislethal/what-kind-of-crypto-trader-are-you
*Never invest more than you are willing to lose and always do your own research before making any investment decisions.
(All pictures are free domain images from snappygoat.com or created by myself.)
No fear over here. Appreciate your analysis and respect your judgement. If anything the past few months have done more for cryptocurrency than the past few years. Look at the adoption and the publicity. As the POTUS believes any publicity is good publicity. HODLers feel the pain but they know what they are doing. The advancements in the tech recently with speed and DExs are truely amazing. Looking forward to a fun year in the cryptosphere.
This will probably be the most pivotal year for Bitcoin. The Lightning Network is just around the corner and after that we will should see some very interesting developments with cross-chain atomic swaps and near instant and almost free transactions for many coins.
Thank you so much for this anfomatoin
Dude this is like you best post ever!! Let’s resteem this do my #ACEH people can see!!
Interesting read
What is causing the dominance?
Well, Bitcoin IS the main trading pair- so as people trade OUT of other coins the dominance will increase. This shows a shift in sentiment towards BTC rather than alt-coins which could be good or bad depending on which side you're sitting on :P
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For future viewers: price of bitcoin at the moment of posting is 8140.00USD
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Btw I have reblogged this. Love it