With Bitcoin falling below $ 12,000 and falling to $ 11,400 in recent days, it also looks like altcoins have lost momentum, even after impressive gains since the beginning of 2020. However, some believe that the “alternative season” “still in progress. alive and well. And these cryptocurrencies still have room to grow, even after tokens like Chainlink and others have risen by more than 100%.
The rise in the dollar may be the main culprit in the recent fall in the bitcoin price (BTC), with safe assets such as gold also falling. However, many believe that a weak dollar is possible, especially with regard to the revaluation of the US stock market. As such, the alternative season is likely to continue with bitcoin to gain momentum.
Although the alternative season surpasses altcoins in terms of the performance of bitcoins, this usually happens when the price of bitcoin itself rises in value. Most of the major digital currencies are linked to bitcoins, and when bitcoins go up, some altcoins jump higher and vice versa. Jonathan Hobbs, author of The Crypto Portfolio and former digital asset manager, told Cointelegraph that the boom can be attributed to three factors:
“First, the altcoin tables looked good, and Ethereum was the pioneer. We saw how the dominance of the top 100 altcoins over the Bitcoin chart broke the two-year bearish channel in July. Secondly, there has been a lot of hype around DeFi projects such as Chainlink, Aave and SNX. Bitcoin has either accumulated or traded in an order since the march, which is usually good for dollar-denominated altcoins. But if bitcoin fell from here, we can see that altcoins are falling parabolically harder. ”
So what drives the recent boom, and does it only affect certain sets of tokens or assets with certain properties? Here’s a deeper look at the upcoming season of options, as bitcoin dominance continues to sink to an annual low.
In 2017, as the price of bitcoin rose to a full-time high, several other digital assets began to gain traction, many of which involve ICOs or other forms of fundraising. Some of these assets significantly surpassed bitcoins and continued to increase in value as BTC began to decline.
BTC began to lose its dominant market value in February 2017, falling from 86% at the time to a range of 50-60% by the end of 2017 during the rally. After falling prices, Bitcoin’s dominance fell to below 35% in January 2018 and then recovered during 2018 and 2019.
Although Bitcoin’s dominance has declined since the beginning of 2020, it is currently 58%, far from the lows in 2018. The market is also different than it was in 2017 as exchanges and elsewhere have raised standards and adjusted the diffusion of alternative currencies. investment options. Ryan Watkins, an analyst at Messari, told Cointelegraph that the projects themselves also show significant improvements:
“The biggest difference between this beef market and the latest (2017) is that the market rewards living products with accumulation of legitimate value. Many protocols actually generate cash flow for users. This is a stark contrast to 2017’s steam software projects, which raised incredible amounts of money with just a blank slate. ”
During 2017, much of the rally was driven by excitement and greed. Since the ICO has given huge returns to investors, more money has been invested in the altcoin market. Fear of getting lost led many to invest during this time, and while many were left with large bags of useless tokens, most of which were on the Ethereum blockchain, there are still more Ether (ETH) wallets that generate more profits than Bitcoin wallets. … … With money. According to Ilya Abugov, a leader in open data analytics platform DappRadar, the previous alternate season was created by hype, and there are some similarities with the current season. He told the Cointelegraph:
“I think we see a lot of similar negative dynamics. Projects are starting to take attractive features in that direction. Less and less attention to quality. Furthermore, the regulatory aspect seems to be largely ignored. ”
Alternative season or DeFi season?
While the alternative season 2017 has affected digital assets in many subgroups of the cryptocurrency world, it appears that the current growth is somehow related to the area of decentralized financing, especially with the emergence of returns when Compound doubled the price. … During the first week of trading.
Other DeFi-related governance tokens have also surpassed bitcoins, including LEND Aave, which has risen nearly 5,000% this year, and YEarn Finance’s YFI token, which beats bitcoin’s unit price with a market value of around $ 425 million to rise. …