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If it wasn’t Bitcoin, then no Altcoins would have ever existed.
Altcoins (alternative coins) is a term used to describe all cryptocurrencies other than Bitcoin. Their name comes from the fact that they’re alternatives to Bitcoin and traditional fiat money. The first altcoins launched in 2011, and, by now, there are thousands of them and every day new altcoins are born.
I say that Altcoins are Dependent from Bitcoin, because in my opinion this is true.
Keep reading to learn the reasons for this.
The Reasons:
Bitcoin Dominance (screenshot below from CoinmarketCap today) is 39.60% compared to all other Altcoins. This means that 40% of the market value is on Bitcoin.
Bitcoin is the first, the largest and most well-known cryptocurrency, and as such, it has the highest market capitalization and liquidity. This makes it the benchmark for the rest of the cryptocurrency market, including altcoins.
Altcoins are often valued in terms of Bitcoin. This means that when the price of Bitcoin goes up, the value of altcoins also tends to go up. Conversely, when the price of Bitcoin goes down, the value of Altcoins tends to go down as well.
Many Altcoins can be traded for Bitcoin on cryptocurrency exchanges. This is an easy way for exchanges to do it as they know that Bitcoin is the most traded asset. This means that Bitcoin is used as a medium of exchange for the other Altcoins.
Altcoins often rely on Bitcoins infrastructure. For example, many Altcoins are built on top of the Bitcoin network, using the same proof-of-work consensus mechanism. This means that they are dependent on the security and stability of the Bitcoin network.
The success of Bitcoin can also influence the adoption and acceptance of Altcoins. If Bitcoin becomes more widely used and accepted, it will lead to increased demand for Altcoins as well.
The regulations that apply to Bitcoin often also apply to Altcoins. This means that the legal and regulatory environment surrounding Bitcoin can have an impact on altcoins as well.
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Most important reason for me:
If it wasn’t Bitcoin, then no Altcoins would have ever existed.
To conclude, I strongly believe that the success of cryptocurrency is always dependent from the success of Bitcoin. The idea of Bitcoin has led to the other many opportunities powered by web3 and blockchain.
Nothing in this article is investment advice and this is designed only for educational purposes.
What is your opinion? Feel free to write in the comments!
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