There is still a lot we don’t know about cryptocurrency, but it has become a global phenomenon in recent years.
Supporters of Bitcoin and other cryptocurrencies argue that these financial platforms are fundamentally trustless as they are not directly linked to any nation state, government or organization. Supporters of cryptocurrency argue that it is preferable to conventional fiat currencies because it does not depend on any government, like the United States.
By observing the cryptocurrency market, you may have seen that as the price of Bitcoin drops, other cryptocurrency stocks (called altcoins) follow suit. The reverse is also true: When bitcoin prices rise, we can expect altcoins to follow suit.
What is the reason behind this? Why is the entire financial services industry paying so much attention to Bitcoin? On the stock market, it would be absurd to assume that the whole of Nasdaq would collapse because of Microsoft shares, for example. This is a ridiculous assumption.
Why Bitcoin Influences Other Cryptos In The Market
There is a lot of pressure on Bitcoin since it was the first in this new business. No one can deny that Bitcoin was the currency that mainstreamed cryptocurrencies and despite its relatively simple premise, the price of Bitcoin has soared to over $ 50,000 through widespread use.
A new industry has been born and virtually everyone in the crypto community owns bitcoin. It is important to remember that the person who created Bitcoin has remained completely unidentified to this day. It should also be noted that over time cryptocurrencies are becoming more and more popular. Some experts say the end of BTC dominance is near. For this reason, people interested in crypto research crypto.com coin price projections in order to find the most suitable currency in the market to invest in. On top of that, some experts assume that BTC will be overtaken by altcoins. in the near future. And one of the examples is Altcoin.
Most of the time, people are just following Bitcoin’s lead while trying to make it better. Bitcoin’s decentralized network, the blockchain, is built on a proof-of-work method supported by over 18 million miners.
As a result, there is a significant degree of decentralization, which ensures that the Bitcoin payment system is completely secure.
Will BTC’s dominance end in the near future?
When it comes to cryptocurrency, Bitcoin is generally considered the first and most important. Investors and industry players have looked to Bitcoin to ensure that there is demand for crypto-protected digital assets in a market that is arguably still in the proof-of-concept stage.
Bitcoin’s dominance has fallen sharply since early April, with the recent record price of Ethereum highlighting the reduction in Bitcoin’s market cap as a percentage of total market cap. Etherium’s ecosystem approach to blockchain is a good illustration of how the cryptocurrency market continues to evolve rapidly.
Although it uses the same decentralized ledger technology as Bitcoin, Ethereum is intended for more complex purposes. Although the Ethereum network can be used to build web applications, its core currency âetherâ is very similar to Bitcoin in that it can be traded. The main distinction between Ethereum-based applications and those built with traditional internet software is that the former are decentralized. Anything that is developed on the network can be controlled and operated without the intervention of a single party. The decentralization of Ethereum is accelerating these trends, which have been revolutionized by the internet in banking, retail and entertainment.
Decentralized systems can be made more complex through Chainlink, a project that aims to do just that. Brian Hausmann, Head of Enterprise Systems at ThoughtSpot, told me that Chainlink is a technology that allows blockchains to access data from the outside world. As Hausmann points out, this “defeats the fundamental purpose of blockchain” prior to the implementation of Chainlink. It is possible to make the process of communicating with blockchains as resilient as the blockchains themselves if we eliminate the “single point of failure” inherent in centralized systems. Decentralized finance, which aims to eliminate traditional financial intermediaries, is an example.
Industry-level innovations have also gained attention recently, but they are not the only ones. Non-fungible tokens, or NFTs, have been more popular in recent months. In the case of the NFT sold by Twitter CEO Jack Dorsey for $ 2.9 million (one tweet), an NFT is a single virtual token representing a digital element, such as an image or audio file. An TVN, which can be considered a copy of the original article, can only be owned by a person who has the TVN in their possession.
More and more famous people are getting into the act by selling their own limited edition collectibles. In the virtual world, anything can be sold as a non-fungible asset (NFA).
This, however, does not imply pessimism about the future of Bitcoin. With a $ 1.5 billion Bitcoin investment disclosed in Tesla’s SEC 2020 filing, the electric car company was able to meet first-quarter profit expectations. When the Visa CEO called Bitcoin a “digital gold” during the company’s second quarter earnings call, he mirrored what many others have said.
Cryptocurrency markets can mature because of this. It is not only inevitable, but desirable, that Bitcoin will lose market share as people trust the technology and discover new applications for it. Previously, even the smallest change in Bitcoin’s price or outlook would send shockwaves throughout the cryptocurrency market, but that seems to change as participants become less dependent on the vagaries of Bitcoin. Cryptocurrency must emerge from the shadow of Bitcoin in order to develop. Maybe we’re starting to see some movement in that direction now.