Whenever we talk about cryptocurrencies in a layman’s term, the first currency to pop up in the mind of every person in Bitcoin. The question rises why and how did Bitcoin get this far ahead of its competitors?
Looking at the market capitalization, Bitcoin’s dominance is evident by the graphs as the yellow lines on the graph stand way higher than other currencies, as shown by coinmarketcap:
Although the overall market cap fell down drastically to $272,076,386,944, but Bitcoin still manages to maintain it’s dominance at 47.93% leaving the second best competitor way behind, at 15.78%. The leading competitors Ethereum and Ripple also seemed to have been on the rise but they lost momentum quite early, leaving the stage open for the premium currency. Despite the major fall in the price of Bitcoin, the trend of dominance in the market cap doesn’t seem to wear out. The possible reasons are as follows:
Bitcoin leads way ahead of the altcoins when it comes to media attention. As they say that there’s no such thing as bad publicity. The saying works perfectly for Bitcoin. The news channels and cryptocurrency news websites are full of news relating to Bitcoin. The dominance, price surges, views of people, money laundering, hacking attempts, and the use of Bitcoin on dark web on the websites like Silk road and for illegal activities are some of the news that circulate most.
Despite the drastic plunges in the price of Bitcoin recently, it takes all the points in case of catching media attention.
As it was the first cryptocurrency ever to be made in 2009, it gathered the attention of most of the celebrities and influencers and got them to invest in the currency. Apart from being the oldest and one of the most used cryptocurrency, it lands on the top of the list of cryptocurrencies, which makes the investors trust in the stability and credibility of the cryptocurrency. Showing his inclination towards Bitcoin a few days ago, the Billionaire Ben Miller, made a bold statement saying:
There are about 1,600 cryptocurencies out there, and I would say that most of them are probably worthless.
The news of the Establishment of the Bitcoin ETF are literally everywhere. Although the request for the ETF made by the Winkelvoss twins was rejected, which also dragged down the prices significantly, but others await hearing in September. This ETF will open trading in the digital coin to retail investors and may send prices higher.
The focus of these ETF’s is on Bitcoin and that explains the disparity.
Financial giants have also shown interest in Bitcoin after calling it junk in the past. The list includes JP Morgan, Goldman Sachs, and Blackrock, and many more. We could say that the interest shown by these financial giants have helped Bitcoin grow more than it already is.
The most number of transactions that are being made in cryptocurrency are led by Bitcoin. This high number of transactions have made the volumes of Bitcoin shoot through the roof. Be it trading drugs on the black market, buying other cryptocurrencies, and buying Tokens for ICOs etc. Bitcoin is termed to be the highest in demand.
History has shown that Bitcoins volatility has pulled the cryptocurrency to unrealistic numbers. Last year, Bitcoin saw a dramatic surge and hit its all time high $20,000. This probability of surge caught the attention of every type of investors. This volatility also led a lot of people into suffering grave loss and there are still probabilities of depreciating and growth spikes, but the predictions of expert still say that there is going to be a crazy price surge at the end of the calendar year 2018.
In an interview with CNBC, Arthur Hayes said that Bitcoin will reach $50,000 at the end of the calendar year.
The volatile nature of Bitcoin is what keeps the traders invested in the currency, it may have seen some drastic highs and lows over the last few months but, it may interest the investors that the currency may rise to the ridiculous price of $50,000 range as per the prophecy of Arthur Hayes.
Looking at the leading competitors of Bitcoin, like Ethereum. They are facing huge scaling issues despite the fact that Ethereum blockchain has given birth to thousands of startups and dApps, and the commendable progress made in raising the most ICOs. There have been many ideas and roadmaps for scaling but some promises have never materialized and pessimism is growing.
This scaling issue is the prime reason for shorting the second digital coin in terms of market capitalization. Although if solutions are devised, ETH might see exponential growths.
All in all, there are plenty of reasons for the premium digital currency to dominate and keep the world of finance and business invested in itself. The approval of the ETF, however, would also prove to be a cherry on the top as the the probability of the prices to go higher would be enormous.