Bitcoin’s success has inspired an entire global industry of cryptocurrencies, valued at more than $3 trillion. The crypto market now has more than 3,000 altcoins, and the number will undoubtedly increase over time. While that has impacted intense competition in the crypto ecosystem, Bitcoin remains the leading crypto in popularity and market capitalization. For more information about bitcoin trading, go to bitcoin prime’s official website.
Today’s most popular altcoins include Ethereum, XRP, Tether, Cardano, Polkadot, Stellar, and USD coin. Like Bitcoin, those alternative coins also have several unique features and applications. However, all of them generally look up to Bitcoin, gaining value whenever Bitcoin surges and vice versa. This article explores the relationship between Bitcoin and altcoins to answer the above question.
Bitcoin’s Role as the Industry Pioneer
Bitcoin was the first successful cryptocurrency launched in 2009. Thanks to its revolutionary blockchain technology, Bitcoin proved that cryptocurrencies could work as transaction currencies and investment assets. However, it took quite some time for innovators to introduce alternative coins.
Bitcoin’s successful performance since its inception earned it a substantial competitive advantage over altcoins, making it the industry leader. Besides, the window between Bitcoin’s unveiling and the introduction of alternative coins allowed it to gain a significant market share. That has enabled it to maintain a substantial lead that would take altcoins many years to topple.
Bitcoin’s position as the pioneer of the crypto industry makes it seem like a superior currency to altcoins. While the proliferation of altcoins has made it extremely difficult for Bitcoin to gain additional market share, it remains the most prominent crypto that other coins follow.
As the industry pioneer, Bitcoin is the reserve currency that investors buy first to gain exposure to the market. It is the basis that investors use to predict market conditions, including altcoins’ prices. Many traders use fiat money to buy Bitcoin and exchange the funds for alternative coins. Even the institutional investors with the most extensive altcoin holdings have at least some Bitcoin as a fallback plan if the markets experience turmoil.
Accessibility
The crypto revolution has seen many corporations, companies, merchants, and individuals adopt virtual currencies. Bitcoin has inspired numerous crypto-friendly businesses worldwide, making it easily accessible to the general public. Thanks to Bitcoin’s decentralized network, users can freely send and receive money worldwide without restrictions.
Like most alternative coins, Bitcoin also primarily serves as a transaction currency and a store of value. However, Bitcoin’s applications do not end there. Several altcoins are Bitcoin clones, using its blockchain to facilitate transactions. The technology also serves other innovative applications, including smart contracts and supply chain management.
Unlike most alternative coins limited to specific institutions and uses, anyone can join the Bitcoin network, and its applications are robust. Besides, Bitcoin is divisible in up to eight decimal points, facilitating large, medium, and micropayments. Several global corporations, institutions, and individuals worldwide hold Bitcoins. And this increases its accessibility to the public than altcoins.
Market Capitalization
Bitcoin’s market cap was about $880 billion as early as April 2022. The most popular altcoin, Ethereum, had a market cap of just about $415 billion, less than half that of Bitcoin. Bitcoin’s larger market cap gives it better liquidity than alternative coins, meaning users can easily convert the funds into other assets or commodities without losing value.
Overall, altcoins have impacted intense competition in the crypto market. However, their limited market cap, restricted usage, and heavy reliance on Bitcoin’s technology are inferior to the Bitcoin ecosystem.
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