Let’s be blunt: the crypto market is a battlefield, and most altcoins are losing. You’re instructed to go out and diversify, spread your bets across a basket of the most promising projects. What if that’s just bad advice? Instead, what if, under all that surface-level hype, Bitcoin is strategically harvesting more power for itself and leaving the rest of them to battle it out for scraps.
IFF, photo by C. Shaffer I’m not saying this just to make up something. I'm looking at a chart. The chart, really.
This chart 1 provides a stark illustration of one manifestation of Bitcoin’s dominance from the last year. In fact, it goes back even further for the more intrepid – unearthing a history that many altcoin enthusiasts would like you to believe does not exist. It provides insight into Bitcoin’s market capitalization, trading volume, and network activity compared to the overall altcoin market. The trend is undeniable: Bitcoin is not just surviving, it's thriving, especially when the storm clouds gather.
Chart Speaks Volumes, Are You Listening?
Look closely. Each time there’s even a whiff of settling dust in the overall market, Bitcoin makes its presence felt. Geopolitical tensions, inflationary concerns, and the ongoing regulatory crackdown only serve to strengthen it. The chart is a definite signal that Bitcoin is on its way to becoming the new safe haven. It’s a digital version of gold and everyone rushes towards it whenever the fiat world begins to shake.
This week is a perfect example. Along with bond yields, equities, even gold, all similarly whipping around as tensions continued to rise in the Middle East. Bitcoin? It would have ignored it and just sailed up over $107,000. Meanwhile, altcoins? They were practically comatose.
Why? Because Bitcoin’s resilience isn't just luck. It's built into its DNA.
Security, Decentralization, Liquidity: The Holy Trinity
Consider Bitcoin the crypto space’s safe haven. Its network security is unmatched. This system has been battle-tested for more than a decade. Its decentralized architecture creates an ecosystem nearly impervious to censorship and without single points of failure. This is something that virtually every altcoin can only dream about. Many are built on wobbly underpinnings, governed by small teams, or in some cases, a single person. They can promise speedier transaction times and shinier bells and whistles. Yet, they are inherently deficient in the security and decentralization aspects that give Bitcoin its strength and resilience.
Liquidity. With most cryptocurrencies, you can buy and sell huge amounts and barely move the price. Good luck accomplishing that with your favorite micro-cap altcoin. Based on luck alone, you might hope to go undetected till you cause the next flash crash. Bitcoin’s liquidity means that it is a much more attractive option for institutional investors and large holders, reinforcing its dominance even further.
The US dollar is slumping? Bitcoin doesn't care. It is the institutional opposite of populism, and the institutional opposite of bad political times ripe with political chaos, strife and demagoguery.
Altcoins: Pretty Faces, Empty Promises?
Here’s the thing, I’m not ready to write all altcoins off just yet. Of course, there are some really great projects that have gone to the mat with innovative technologies and passionate communities. The far overwhelming majority are simply that— noise — competing for your eyeballs in an ever more labored and cluttered marketplace. They don’t have a unifying narrative, they don’t have a compelling catalyst, and they don’t even have a really good primary use case.
Remember the ICO boom of 2017? Heck, how many of those projects are merely standing today, let alone doing what they intended to do? How many delivered on their promises? The altcoin graveyard is decked with the corpses of once glamorous, now miserable, failed experiments.
Ethereum, frequently heralded as Bitcoin’s primary rival, serves as the perfect example of this delicacy. We saw it this week: when the market turned sour, ETH took a much steeper dive than Bitcoin and struggled to recover. And that’s not a sign of strength, that’s a sign of weakness.
Altcoins are equally, if not more, prone to regulatory risks. Governments are starting to crack down on the crypto market, and they're more likely to target smaller, less established projects than Bitcoin. Why? Because Bitcoin is too big to fail. Yet it’s become a global phenomenon, and any efforts to ban it here would be surely unsuccessful.
I get it, you probably have a bunch of altcoins in your bag. You might be excited about their potential. Infographic from Strong Towns Here’s where I challenge you to focus on the data. Don’t let hype and hope get the better of you. The chart doesn't lie.
The Future? Bitcoin Reigns Supreme
So, what does the future hold? And last but not least, personally I expect Bitcoin to further consolidate its dominance, completely clinching its position as the crypto space’s undisputed king. With each boom altcoin cycles will become shorter and less predictable, with the majority of projects disappearing into the graveyard. A handful might continue to exist, but even then we’ll see them emerge as niche players, providing specialty functions as part of the larger ecosystem.
He warns that it might take a firmer, more convincing catalyst to seriously scoop up risk appetite and wake up the sleeping altcoin market. What if that catalyst never comes? What if this time the market really has matured? It could finally come to appreciate the long-term value and stability of Bitcoin, distancing itself from the speculative appeal of altcoins.
Don't get me wrong: mid-sized wallets are accumulating Bitcoin, but opportunistically, suggesting range trading. This is all very different from an outright altcoin season.
The end of the altcoin era may not be such a sudden, cataclysmic occurrence after all. Perhaps instead of a cinematic collapse, it will be a slow, grinding death, as Bitcoin slowly drains it of market share and attention. The writing is on the wall—or more accurately, the writing is on the chart. Are you ready to face the music?
