With Bitcoin dominance hovering around 70%, there is a consensus among majority of the crypto industry that an increase in BTC dominance may kill off some altcoins. Industry analysts are advising hodler to hold BTC in order to protect their funds. Today we take a look at how Bitcoin dominance is killing off alts and how you can protect your investment.
What is Bitcoin dominance?
According to the latest data from Coinmarketcap, Bitcoin’s dominance was at 68.3% on Monday, 5 August. This is the highest it’s been in over two years!
Bitcoin’s dominance rate is important as it tells investors what the specific cryptocurrency’s share of the total market cap is. At the time of this article, Bitcoin’s market cap was $307,102,510,911.
An increase in the dominance of Bitcoin is good news for those who are hodling Bitcoin. It serves as an indication that a price rise is sustainable or not.
How Bitcoin dominance is killing off alts
The general rule of thumb is that when Bitcoin goes up, the alts bleed. But then Bitcoin finds support and gives alts the opportunity to catch up. However, should Bitcoin’s dominance continue to grow to 80%, several altcoins may die due to low trading volume.
Max Keiser, a well-known Bitcoin maximalist and former Wall Street trader, is one person who believes that alts will die when BTC’s dominance hits 80%. He has been featured in various news articles urging the public to get out of other crypto assets and rotate into Bitcoin.
Keiser posted on Twitter on 6 August that:
“Bitcoin dominance 68.2% – heading to 80% – as alts die in favor of BTC. The 2014- 2017 era of alts and hard forks is dead. Don’t be the last to rotate out of alts into BTC.”
Now there is no way to know for sure whether or not Keiser’s prediction will come true or not.
However, when looking at the current trade war between the United States and China, one cannot ignore the fact that Bitcoin’s popularity is increasing. In recent news, the Chinese offshore Yuan exchange rate (CNH) fell from 6.79 yuan per USD to 7.1 per USD in a matter of 60 minutes. Bitcoin on the other hand, increased in value. It is widely believed that that the drop below the yuan’s major psychological level fueled the Bitcoin rally. It seems as if Chinese investors may be rotating funds into BTC as the yuan depreciates.
Get the inside scoop into Bitcoin and cryptocurrency market
Should altcoins be killed off by Bitcoin’s dominance and low trading volume, which altcoins are likely to survive? This is the next logical question. You may be wondering, which alts should I keep and which should I dump? Where will my money be safe?
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*Please note that this is not financial advice.