Steemit Crypto Academy Season 2 Week 5 Homework Task for @imagen
It has been another wonderful week. Professor @imagen has explained dominance in relation to cryptocurrency, altcoin season and cryptocurrency pennies in his lesson for the week. I would be handling the assignment tasks without further ado.
Dominance
Dominance means superiority over something. It refers to the influence that a unit has over other units under the same context.
Dominance in the world of crypto currency refers to the greatest percentage in market capitalization that a crypto coin or asset holds in the global market capitalization.
Using the explanation, we can outline that Bitcoin has dominance in the crypto currency world. Bitcoin is the first successful crypto currency. As a result of this, there is a lot of investment in Bitcoin. Bitcoin is the major term any newbie in the crypto space tends to hear about.
Bitcoin has paved the way for other crypto currency coins which are collectively called Altcoins. Although the innovation of these altcoins has lead to a shift of investment from the original crypto currency to themselves, Bitcoin still records dominance amongst all.
Dominance of Bitcoin
As of the time of writing this post, the dominance of Bitcoin is 42.47% of the global market capitalization. Although the value seems high, Bitcoin has seen a significant drop in it's dominance because of increasing interest in altcoins.
The total market dominance of the world’s largest cryptocurrency has dropped from 60% to 42.8% within the last 6 weeks.
source
Real-life Scenarios when Bitcoin Experienced Significant Dips
Some time in 2017, Bitcoin experienced an incredible bull-run. Demand for the precious crypto currency was souring so high but the magic didn't last for long.
Bitcoin witnessed a bearish market through out the year of 2018 before stabilizing later in 2019.
Various crypto markets were affected because of the dip experienced by Bitcoin in 2018. Among the few are;
Ethereum
The candlesticks represent the price movement of BTC/USDT pair while the blue line indicates the price movement for ETC/USDT pair. From the illustration, it is clear that the price movement of Bitcoin affected the price of Ether. The Etherum market experienced an even much lower fall than Bitcoin during this period but there is a high correlation between their price movements.
Ripple
From the above illustration, the candlesticks represent the BTC/USDT price movement while the orange line represents the XRP/USDT price movement. The illustration depicts that fluctuations in the market of Bitcoin led to relative fluctuations in the Ripple market.
Another scenario is seen on the 21st of January, 2018. During that week, Bitcoin witnessed a significant drop and this affected so many altcoins such as XRP, BCH, ETH, LTC, and many more. It is illustrated below:
What is the Altcoin Season
We have concluded that the price movement of Bitcoin relatively affects the price movement of altcoins. That is, a rise in Bitcoin causes a rise in other crypto currency, and vice versa.
There's a saying that goes this way: "To every law, there's an exception". This is also seen in crypto space. Sometimes, price movement of Bitcoin does not determine the price movement of altcoins.
The "Altcoin Season" is a scenario where the altcoins are flourishing regardless of the downward price movement of Bitcoin. Simply, altcoins go up, while Bitcoin goes down.
Technically, it is when 75% of the Top 50 coins perform better than Bitcoin over the last 90 days.
Description of two altcoins that are in the TOP 50
Etherum
Etherum is a platform that was created in 2015 using blockchain technology. It is the first project to ever use smart contract. As a result of this, Etherum offers the creation of dApps (Decentralized Applications) using it's programming language.
Etherum is the biggest rival to the Bitcoin network. Below are the stats for Etherum:
| Property | Description |
|---|---|
| Native Token | Ether |
| Rank | 2 |
| Market Cap | $444,541,023,288 |
| Trading Volume | $109,399,798,513 |
| Available Supply | 115.9million |
| All-Time High | $4,356.99 |
| All-Time Low | $0.432979 |
Litecoin
Litecoin was created on October 2011. It is a fork of Bitcoin that was created using the "Scrypt Proof-of-Work Algorithm" in order to make hardware attacks difficult. But this consensus algorithm requires a very large RAM (Random Access Memory) unlike Bitcoin's SHA-256 algorithm.
Litecoin has a block generation time of 2.5 minutes which is much faster compared to the 10 minutes offered by Bitcoin. Litecoin recorded a new all-time high of $410.26 just three days ago on the 10th of May, 2021. Below are some stats for Litecoin.
| Property | Description |
|---|---|
| Rank | 10 |
| Market Cap | $21,361,584,763 |
| Trading Volume | $14,400,053,533 |
| Available Supply | 66.8million |
| Total Supply | 84.0million |
| All-Time High | $410.26 |
| All-Time Low | $1.15 |
How News influence the Price of Cryptocurrencies
Case 1:
During the early hours of 15th April, 2021, Elon Musk made a tweet about dogecoin.
This tweet caused a significant rise in the market of Dogecoin. More people began to jump into the market because someone famous picked interest in the project.
Case 2:
On the 24th of March 2021, Elon Musk made a tweet announcing that Tesla would be accepting Bitcoin as payment for their cars.
This tweet caused an upward movement in the Bitcoin market over a period of time.
Case 3:
Yesterday, during the late hours of 12th May 2021, Elon Musk tweeted that his company wouldn't be receiving Bitcoin as payment any more due to energy consumption required to mine Bitcoin.
As a result of this tweet, the Bitcoin market has experienced a decline in value within the past 24hours.
SafeMoon
SafeMoon is an altcoin which was launched in March 2021. It is referred to as a cryptocurrency penny because its value is traded under $1.
The project rewards people who hold on to the tokens. On the other hand, there is a penalty for selling the tokens. A 10% fee is charged for selling of tokens. 5% of this fee is distributed to holders of the coin as rewards.
Below are stats for this project:
| Property | Description |
|---|---|
| Rank | 36 |
| Price | 0.00000748 |
| Market Cap | $4,345,486,452 |
| Trading Volume | $167,642,683 |
| Available Supply | 585,536.37 billion |
| Total Supply | 1,000,000 billion |
| All-Time High | $0.00001094 |
| All-Time Low | $0.00000004 |
Conclusion
Bitcoin has dominated the crypto space for more than a decade. With the emergence of altcoins, it seems that Bitcoin would have to give up its position as number 1. Altcoins are proving to have so much potential, I can only conclude that it's just a matter of time.
Special thanks to @imagen
Hola @uchescrib
Gracias por participar en la Academia Cripto de Steemit.
Thank you for the review prof