Crypto Academy Week 13 - Homework Post for @imagen
INTRODUCTION
The crypto markets have been a major topic for years with bitcoin at the forefront of it all. A lot of factors constitute the market and how it moves with new ones popping up everyday. Professor @imagen has done great explaining BTC dominance and a tip of the Altcoin concept. Now let’s get into the assignment...
Dominance in the crypto market
Bitcoin basically gave birth to the concept of cryptocurrencies back in 2009. 12 years later, it is still topping the crypto headlines with a market capitalization that is almost half of the entire crypto market capitalization. The portion of the total market cap occupied by Bitcoin defines its dominance.
Bitcoin is a crypto investor’s favorite cryptocurrency occupying a large percent of the total trading volume in the crypto space. This coin moves way faster than other coins in bearish and bullish conditions. For example, we saw BTC go from $3k to a massive $28k at the end of 2020. It went more than double reaching an all time high of about 65k in 2021. Although other coins have improved during this bull run, they really cannot compare.
With the bitcoin dominance, a lot of coins do not really stand on their own. Bitcoin is a “market maker” in the crypto world controlling a large portion of the market cap. This, of course, has effects on other other coins in the market. Whenever there is a surge in the price of bitcoin, we see a lot of Altcoins go green. This is also the case when bitcoin begins to decline.
Dominance simply means preeminence or superiority over others. We can see that this is the situation of bitcoin with other cryptocurrencies. This dominance, however, has been dropping over the years with the emergence of the popular Altcoins as shown below:
The graph above shows the dominance of bitcoin from July 2019 till date. We can see the steady drop of the bitcoin dominance from the beginning of the year to about 42.42% in its current value.
Let’s look at another graph:
The graph above shows the dominance of bitcoin from 2014 till date. We can see a decline in the market dominance of bitcoin in 2017 following the popularity of ICOs. The dominance went as low as 36% in January of 2018. This marked the beginning of the Altcoin season but we’ll talk about that later.
Instances of strong falls in the crypto market and affected currencies
Like I said earlier, Bitcoin moves almost the entire crypto market. Its fall has affected many cryptocurrencies a couple of times and I’m going to talk about two of them:
The Bitcoin crash
In 2018, there was a major crash in the crypto market called the Cryptocurrency crash or bitcoin crash. A series of events, as explained here made investors lose faith in cryptocurrencies leading bitcoin down the drain. The price of bitcoin fell to a little above $5k from its high of almost $20k. The graph is shown below:
This fall affected several cryptocurrencies as seen in the case of steem and trx below:
The 12th may nosedive
During the late hours of the 12th of may, 2021, we began to see bitcoin take a nosedive. It had a sharp fall that day as shown below:
As usual, it affected other cryptocurrencies. Let’s look at doge and BTT this time:
What is the Altcoin season
Back when bitcoin was the only popular cryptocurrency, its market dominance was almost 100%. But since the rise of Altcoins, bitcoin’s dominance has been falling with greater falls during certain periods. This is due to the Altcoin season.
Altcoin season (or Alt season for short) is a period where bitcoin begins to lose its market dominance. During this time, investors become more interested in Altcoins significantly increasing their market capitalization dominance as compared to bitcoin.
Are we currently in the alt season
Yes! And for a long time too. We can see this from the charts below:
The first chart shows the dominance of Ether at almost 20%.
The second chart shows the dominance of BNB at about 4%.
Description of two top Altcoins
For this task, I’m going to be talking about Binance coin(BNB) and Tronix(TRX).
BNB
The binance coin (BNB) was launched in July of 2017 during its ICO with each token going for 15 cents. The coin moved to Mainnet on the 23rd of April, 2019. It originally operated on the Ethereum blockchain before it was moved to the Binance Chain.
BNB is the native currency of the binance exchange and can be traded for other cryptocurrencies. The coin was designed as a deflationary coin with an initial total supply of 200 million BNB. According to the whitepaper, BNB will be burnt every quarter depending on the binance trading volume until 50% of the total supply is burnt. This will leave 100 million coins.
Some BNB stats as of writing
| Price | $552.55 |
| All Time High | $690.93 |
| Rank | #3 |
| Market cap | $84,779,983,630.51 |
| Trading volume | $6,887,041,826.2 |
| Curculating supply | 153,432,897 BNB |
| Total Supply | 169,432,897 BNB |
| Maximum supply | 170,532,785 BNB |
TRX
Tronix (TRX) was created in 2017 by Justin Sun. The ICO held in August 2017 where each token was sold at $0.0015.
TRX was originally launched on the Ethereum blockchain before it was moved to its native blockchain, the Tron Blockchain, in 2018. After the migration, Tron began to claim market rivalry with Ethereum.
TRX is a utility token on the Tron Blockchain that aims to help to help content creators. Consumers can pay content creators for their services with TRX. Content creators can also access blockchain services with the coin through a freezing process for energy and bandwidth.
Some TRX as of writing
| Price | $0.1172 |
| All Time High | $0.3004 |
| Rank | #22 |
| Market cap | $8,355,167,333.94 |
| Trading volume | $4,673,944,156.35 |
| Curculating supply | m71,659,657,369 TRX |
| Total Supply | 100,850,743,812 TRX |
How news influence the price of cryptocurrencies
A lot of times, cryptocurrencies are moved by news and social media hype. This is what we call sentiment. This type of situation has affected cryptocurrencies in different ways as I will show below:
Joe Biden proposed new tax structures
On the 14th of April, bitcoin reached a high of almost $65k. Investors were really happy but the markets started to fall until it went below $50k on the 23rd of April. This was because Joe Biden had proposed higher tax structures on the US citizens. The news alone brought the price of bitcoin and other Altcoins really down.
Ripple won a hearing against the SEC
XRP price had been going up during the month of April but it went really high after it was announced that Ripple had won a case hearing against the SEC. The hype lasted for days leaving XRP very volatile. I, for one, made some profits off the market before pulling out.
Tesla drops bitcoin payments
On recent news, Tesla just dropped the whole idea of paying for their services with bitcoin. This news came out on the 12th of May. Elon Musk, the owner of Tesla, is a whale and he has the power to move markets by words. A lot of people are saying that he is playing with the market but Tesla claims that Bitcoin is not environmental friendly.
Describing Shiba Inu
Recently, this coin has been on the headlines and on trend hashtags on twitter. It peaked my interest especially when binance announced its listing on the exchange. So what is this Shiba Inu coin?
Built under the Ethereum blockchain, the Shiba Inu coin was launched in August 2020 with the symbol SHIB. It was named after the popular Shiba Inu dog breed which is also the dog breed face of the doge coin. Its wallpaper has a dog theme and is calls the “woofpaper”.
Just like the doge coin, the Shiba Inu is considered a joke by a lot of people. The coin is described as “the doge coin killer” and is the first coin on Shibaswap. It serves as a utility token on Shibaswap to DIG for BONES or BURY coins.
Like I said earlier, the coin has been making headlines these days. It was recently listed on binance which made it increase in price. Also, Vitalik Buterin recently donated $1 billion worth of Shiba Inu to India asCOVID-19 relief funds.
Shiba Inu stats as of writing.
| Price | $0.00001925 |
| All Time High | $0.0000388 |
| Rank | #25 |
| Market cap | $7,591,657,758.90 |
| Trading volume | $6,938,460,024.59 |
| Curculating supply | 394,796,000,000,000 SHIB |
| Total Supply | m1,000,000,000,000,000 SHIB |
CONCLUSION
Like I said earlier, the crypto market is something of major interest. As the bitcoin dominance keeps reducing, a lot of people are beginning to put their faith in Altcoins. I feel like In the future there would be some sort of balance.
Special thanks to @imagen
Hola @awesononso
Gracias por participar en la Academia Cripto de Steemit.
Thank you professor for the review