Smaller Altcoin Projects Cumulatively sustain Bitcoin moving sidewaysJanuary 19, 2019
When analyzing the long term investment prospects of BTC, it has been reportedly stated that flooding Altcoins will in the long-term deflate the value of almost all cryptocurrencies including the Bitcoin. Thus, the indefinite appreciation of Bitcoin by Optimists loses ground.
While the ideology of the Bitcoin price falling to zero is controversially unacceptable, the indefinite appreciation factor being a myth is a noteworthy reality.
As opposed to the Bullish Outlook, the Bearish Outlook is based on the fact that “Bitcoin has no fundamental value” and bearish analysts are asserting that the market will realize this fact either sooner or later.
A report from the Federal Reserve Bank has published the above theories, and in their paper, they have tried to provide some concessions to support the fact that Bitcoin will not crash to zero; however, the paper stated that it is possible for everyone to accept that Bitcoin is trading above its fundamental value which is zero. The paper further added that several securities trade above their fundamental value.
Being an asset type that is not backed by a real-world product the price factor is not predictable; therefore, leading to significant volatility.
The delisting of several Altcoins which are minor rivals to Bitcoin is a proof for the bearish outlook. Of note, Kucoin recently delisted about 10 Altcoins due to issues with weak liquidity and decreased trading volume. This is partly in response to the overall downturn of the cryptocurrency market as well. Kucoin also stated that several tokens were not able to comply with “special treatment rule.”
Investors expect a certain degree of protection of their legitimate rights and interests. Regulatory bodies ensure this by setting standards for tokens. So, investors should trade under caution. On practical grounds, it is only a fair system to trust those tokens that put their mettle to work to ensure compliance.
While several Altcoins are rallying upwards, it has been seen that Bitcoin is trending sideways. A major clarification provided by Mati Greenspan in this regard is that Altcoins are “Tightly correlated to Bitcoin.”
The current trend is because smaller projects will have a bigger impact with Bitcoin lacking its traditional volatility.
The sudden leaps of the Altcoins are because of the reality that when the overall sentiment is declining smaller token developments attract a lot of development. Despite the current trends, the quest for rivalry has not ended. Newer coins continue to hit their market with their convictions. No matter who comes or who goes, Bitcoin the pacemaker seems to be here to stay.