It seems that the Altcoin market trend depends to a much extent on the price behavior of the world’s top digital coin Bitcoin (BTC). We usually notice that when the price value of Bitcoin goes down, the altcoin markets also go down. A recent Coinbase report also supports this claim which even says that Bitcoin is like a gateway to altcoins.
Just 24% of crypto investors faithful to Bitcoin
Coinbase report has revealed a key fact about the behavior of investors and claims that only a small portion of new investors remains faithful to Bitcoin and the rest of the investors show interest in the altcoin market. According to the Coinbase research, there are just 24% of the new investors who stick to Bitcoin when 60% of them buy Bitcoin as their first crypto purchase. The other 36% eventually lose their faith in Bitcoin and purchase other crypto assets.
While describing the overall dominance of Bitcoin in the market, the Coinbase report says that the Coinbase customers trade crypto assets other than Bitcoin at a rate of 3% which is higher than their market capitalization suggests. While on the other hand, despite the dominance of Bitcoin in the market, the Coinbase users show more preference to non-BTC assets.
The Coinbase research also discloses another fact that Bitcoin dominance plunged to 30% in the 2017 bull-run during the explosion of ETH ICOs when Ethereum’s trading volume reached 50% and it threatened the dominance of Bitcoin in the market.
The report further illustrates the sentiment that drove such kind of behavior.
“This could be for a variety of reasons, but one is largely psychological. As people feel good about their initial crypto investments (into Bitcoin), they branch out to find other possible categorical winners (as evident in the 2017 bull run).”
Bitcoin has proved a kind of a “gateway” to altcoins in the past according to some analysts and it continues to act as a gateway to the altcoin world in the present time as well.