The crypto community is totally down because the proverbial king- bitcoin is seriously sick. The members of his community (altcoins) are also not feeling fine as a result of the king’s condition.
This usually happens each time the king is sick. It is now a recurring problem in the crypto community. This prompted me to write this article. Why is bitcoin so dominant in the crypto community that it gets everyone affected ? Is there a reason for such power that the king wades over the community ? This is what this article will tell you shortly.
The following reasons will shed light on the dominance of this king:
Firstly, in the crypto community it is common for many coins to move in similar patterns. Since, bitcoin is the first crypto currency and also the largest crypto currency by market cap, it influences the prices of other coins. If it goes up in price, other coins tend to go up also and vice versa. Being the first and original crypto currency, it has made bitcoin to have a store of value and popularity. Investors always look at the rate of performance of bitcoin before investing in other altcoins.
Secondly, the secure network of bitcoin blockchain. Bitcoin has the most secure network in the crypto world. This is because of the proof-of-work consensus mechanism that it uses which makes it hard to hack thereby limiting any security threat.
In addition, many altcoins are just bitcoin clones. As a result of the value bitcoin offers and its popularity, there had been proliferation of coins in the crypto space with many blockchains copying the bitcoin code and redefining it to solve other problems. Most of the times this same altcoins still follow the lead of their king – Bitcoin.
Furthermore, bitcoin is viewed as a reserve currency for cryptocurrency. Just like USD is the reserve currency to the global stock market, so is bitcoin to the crypto world. Also some traders compare the value of altcoins to the value of bitcoin before trading. This makes bitcoin more powerful than ever.
In conclusion, from the above reasons we can see why bitcoin is so dominant in the crypto world. Once there is a plummet in price of the “king” , it will surely affect the price of the members [altcoins] of the community.