Altcoins Bleed as Bitcoin (BTC) Falls to $10,600, Down 18% in 24 Hours
Altcoins Beat a Hard Retreat
Ouch. After a jaw-dropping rise, Bitcoin and altcoins are beating a hard retreat. In the past 24 hours, BTC, according to Coin Market Cap, has lost some 17% — a collapse that must be reminiscent of last year’s brutal bear market. While Ethereum and XRP are down by similar percentages, Bitcoin market dominance has begun to rally. Hard.
In fact, as spotted by a number of analysts, this statistic, which measures how much of the total market capitalization is Bitcoin, is reaching levels not seen since December 2017. December 2017 is, of course, when Bitcoin rocketed to $20,000, all while altcoins, save for hype-driven players like Ethereum and XRP, were flatlining.
BTC dominance now reads at 62.0%.
If you scroll down CoinMarketCap’s home page, it becomes apparent why the dominance structure of the cryptocurrency market is in tumult. Altcoins, namely small caps and those with small communities, have begun to slip real hard, as investors seek shelter in big caps. Many of the assets have lost over 20% of their USD value in the past 24 hours, slipping after already selling off against BTC.
Notable commodities analyst Peter Brandt says that the uptrend in Bitcoin dominance may continue, despite the fact that investors have been waiting on the fabled “altseason” for months. Brandt, a notable BTC maximalist that believes a $100,000 Bitcoin is reasonable, claims that “crypto maniacs” who believe altcoins will “benefit from bull runs in Bitcoin… may be very disappointed.”
Backing his point, he likens the previous bull run to the Nasdaq’s Dotcom boom and bust, but this surge to the subsequent rally, during which “altcoms” died out and “dotcoms with real value exploded.”
What he seems to be implying is that during this impending bull market, cryptocurrencies without long-term viability or solid products will begin to peter out, losing value against BTC.
There may be good reasons for this trend. Most notably, institutional players, which have begun to siphon back into the cryptocurrency market, are taking a hard focus on Bitcoin.
In May, Grayscale Investments, a key branch of the New York-based crypto conglomerate Digital Currency Group, released its “Digital Asset Investment Report” for Q1 of 2019. According to the report, Grayscale pulled in over $42.7 million over the first three months of this year. This isn’t a hefty sum per se, what makes this notable is that over 95% of the $42.7 million, 73% of which came from institutional investors, went right to the firm’s Bitcoin Trust, easily its most popular vehicle.
While Grayscale’s clients aren’t representative of the whole market, the numbers do tell you something about what investors are focusing on.
The focus on the market leader may also have roots in regulatory concerns. You see, key financial regulators, namely the U.S. Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), have focused on Bitcoin, perhaps because they struggle to understand smart contracts, sharding, and the other nuances and technical jargon that come with alternative chains.
Without the proper endorsement from the right service providers and governmental agencies, institutional money may be slow to flow into altcoins.