Bitcoin may be the biggest and most significant digital coin in the crypto market, but that doesn’t excuse it from the volatility of the market.
Like many other digital currencies, Bitcoin has had its fair share of price volatility. Bitcoin’s high dominance in the crypto market is no secret, and for some time now, its price influence has been negatively felt in the market.
Bitcoin’s price rise has been taking altcoins along for a climb, and when the most significant cryptocurrency on the market sees a bearish trend, there is nothing but “reds” for altcoins prices as well.
Its price influence over the years has been linked to several factors. Interest from institutional investors, the primary demand and supply law, political decisions, regulations, and laws from government all constitute a more significant portion of these factors. However, the ever-growing cryptocurrency ecosystem is also a vital factor, cutting short bitcoin’s price control.
A new report on index study, by one of the top alternative data providers, has shown that the growth of the cryptocurrency ecosystem is hindering Bitcoin’s price dominance. When Bitcoin first burst to the financial scene, it was somewhat, the only and most preferred entry point into the cryptocurrency market. However, many investors, thanks to the growing list of digital currencies, now have alternative entry points into the market.
According to the study based on a predictive index built on data gathered between Aug 1 and Oct 1, Bitcoin’s price fall is mainly because of the number of digital coins and related opportunities in the cryptosystem. Over 200 new crypto projects are now rivaling Bitcoin, all being equipped and designed to better what the largest coin has already achieved.
Irrespective of the fact that many of these projects don’t work, it, however, gives that ‘another option’ opportunity to many investors to avoid being steered into whatever direction Bitcoin goes.
Bitcoin’s price is now heavily being driven by new competing digital coins and projects, as well as new blockchain technologies. Many individuals and investors may take this as a sign that Bitcoin maybe and just maybe, coming to an end or struggling times. Others also see it as a perfect way to ensure healthy competition in the crypto market and avoid Bitcoin’s dominance, which has stood for years.
Bitcoin’s responsiveness to this new competition is a sign that the crypto market is advancing, and the development of competitors might compel the digital coins to strike to even greater heights.