These days we have been getting a lot of good news about Bitcoin.
President-elect Trump is considering a plan to buy billions of dollars worth of Bitcoin, and add it to a strategic reserve in the United States. Meanwhile, states like Pennsylvania, New Hampshire, and most recently Oklahoma have proposed Bitcoin reserves for themselves as well.
Yesterday, CZ of Binance posted to X that "What's good for bitcoin is good for alts", and I couldn't agree more. In this article, we will talk about how Bitcoin is a gateway drug into the broader world of cryptocurrencies, and how capital tends to flow from Bitcoin into these alternative projects.
The Gateway Drug
Thanks to all the media attention it has been receiving, almost everyone has heard of Bitcoin by now. However, only a small portion of the population knows about more advanced smart-contract platforms like Ethereum or Solana. Finally, once we get into cryptocurrencies ranked below the top 10, only a tiny fraction of the population have heard of them.
Therefore, we can think of Bitcoin as just the tip of the iceberg.
Once people begin to understand the principle benefits of Bitcoin - self-custody, near instant, borderless transactions etc., those with an open-mind start looking into the innovative applications of the technology, and discover a rich ecosystem of smart contracts, DEXs, permissionless lending, NFTs, and more...
Yes, there are plenty of scams that need to be avoided. However, gems exist, with dedicated founders and communities that aren't going away any time soon. Their consistent efforts throughout bear and bull markets eventually draw attention, both positive and negative, from "no-coiners" and Bitcoiners alike.
The Law of Attraction
If you've studied The Law of Attraction, you know that whatever you think about with emotion (whether positive or negative) will become a bigger part of your reality. Therefore, Bitcoiners who attack alts only end up giving these projects more publicity, and therefore more room in the population's collective consciousness.
The trend from no-coiner to Bitcoiner and then to "shitcoiner" may be slow, but it's happening nevertheless. If we're even more perceptive, we can see that most newcomers are getting into crypto these days via other methods like SoFi (such as Hive and InLeo), or DePIN projects like Helium and Hivemapper, skipping Bitcoin entirely.
The Money Waterfall
Institutional capital is flowing mainly into Bitcoin, as that's the primary "safe" crypto asset for now. That said, once the wealth arrives in Bitcoin, it can more easily flow into alts via centralized exchanges, as well as through cross-chain DEXs like Thorchain and Maya Protocol.
When the price of Bitcoin spikes due to positive news, and then eventually finds support, investors and traders feel like they can take more risk, and start trading portions of their Bitcoin for the more innovative alts.
Once an investor actually has some capital in these alternative projects, they will look at them in a more positive light, and eventually start learning how they work.
Until next time...
What's good for Bitcoin is good for alts, indeed. Good publicity about Bitcoin means more people will be drawn to it, and the alternative projects that derive from its fundamental principles.
Also, as the price of Bitcoin continues to rise thanks to institutional, government, and retail interest, that capital will eventually flow into more risky alts, and investors will be motivated to learn more about them.
If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.
Further Reading
- Inside the Minds Of No-Coiners, Bitcoin Maxis, and Shitcoiners