The real big brother is the one who takes the lead. The bull market rises first. Bitcoin is the big brother in the currency circle who takes the lead.
If you are a cryptocurrency player who has been in the currency circle for a few years and has experienced more than one or two rounds of bull-bear transitions, you should have noticed one thing. In addition to the small bull market driven by specific issues, if it is the big market trend in the entire cryptocurrency field , usually Bitcoin starts to rise first, and then the rise is transmitted to other cryptocurrencies.
"Bitcoin" and "coins that are not Bitcoin"
There is a saying that all coins that are not Bitcoin are called Altcoins. The reason is that many early cryptocurrencies were just forked copies of Bitcoin, just like pirated Bitcoins, so they are called Altcoins. However, the field of cryptocurrency is gradually maturing. Currently, many cryptocurrencies are developed based on different purposes and more innovative technologies. It can no longer be understood by the word copycat, but this term is still used today to refer to all bits. Cryptocurrencies other than coins.
The largest and most famous altcoin at present is, of course, the second-biggest altcoin in the currency circle, Ethereum $ETH. If we break down the top ten or twenty largest cryptocurrencies, we can see the development and focus areas of cryptocurrencies over the years. Cryptocurrencies have slowly stepped out of the shadow of Bitcoin and developed more application directions.
Bitcoin’s market capitalization ratio fluctuates between 40-70%, making it the most important cryptocurrency.
Although cryptocurrency has developed into a dazzling array of fields, and there are currently tens of thousands of cryptocurrencies, Bitcoin's status is still unshakable. It has always been the big brother of cryptocurrency for many years and has always been the largest by market value. Cryptocurrency.
Why did Bitcoin rise first? two possible reasons
Bitcoin’s far-leading popularity and market consensus
Bitcoin is the most convenient to enter and trade, and has the best market circulation.
In short, compared to other cryptocurrencies, Bitcoin is too famous and is far ahead in terms of popularity. You can’t even see the lead like car taillights; most people’s first contact with cryptocurrency may be Bitcoin. It is also easier to find content related to Bitcoin when searching for information.
After all, cryptocurrency is a relatively innovative asset, and its value is largely based on "consensus." The most vernacular explanation of consensus is that enough people think it is valuable, so it is valuable. The stronger the consensus, the higher the value. Bitcoin is currently the cryptocurrency with the strongest consensus. It has taken more than ten years since its creation to establish such a value consensus. The consensus on Bitcoin has also exceeded the currency circle and gradually spread to traditional finance and national fields.
Many well-known Wall Street investment institutions, such as Ark Fund, which is already friendly to cryptocurrency, or Wall Street giants BlackRock and Fidelity Fund... are also trying to apply for Bitcoin spot ETFs and plan to launch Bitcoin to the public. Investment products, some of which have already begun to hold Bitcoin as asset allocation.
Bitcoin has better liquidity and is easier to enter and trade
Having trading pairs will make transactions much more convenient and faster. Among the cryptocurrency exchanges we usually use, apart from stablecoins, Bitcoin is the cryptocurrency with the highest number of trading pairs.
Bitcoin is the most famous. Many people have only heard of Bitcoin and not of cryptocurrency.
Bitcoin has the strongest value consensus, and some institutions or government units will only consider Bitcoin
If you want to buy coins to enter the market, Bitcoin is the easiest to buy.
Even if you may want to buy other cryptocurrencies in the future, Bitcoin has the most liquidity and is the most convenient to trade.
Therefore, Bitcoin will be the first choice for many people to buy coins for the first time, and the entire cryptocurrency market must be due to the entry of a large number of external funds. When a large number of external funds enter the market, Bitcoin is the first choice, and Bitcoin will naturally lead other Cryptocurrencies rose first.
Although Bitcoin rises first, other cryptocurrencies rise more during the bull market
而比特币与整体加密货币之间还有个有趣的关联，文章前面提到过比特币市值占比，如果同时检视比特币市值占比与比特币价格走势：
When the price of Bitcoin rises sharply, which usually means that it is in a bull market, Bitcoin's market capitalization ratio will fall, which means that other cryptocurrencies rise more in the bull market; although Bitcoin is still rising, other currencies are rising more. More, so the proportion of Bitcoin decreases.
In the bear market in the currency circle, Bitcoin is relatively resilient. Compared with many cryptocurrencies that often suffer losses of more than 80% or 90% in bear markets, Bitcoin is relatively resilient. During periods of market transition, Bitcoin usually leads the way higher. As for the entire bull market stage, since Bitcoin is already the largest cryptocurrency in terms of market capitalization, other cryptocurrencies will naturally rise more and have greater room for growth. However, there are too many types of cryptocurrencies. If you choose the wrong one, it may be better to just hold it. Bitcoin, this part recommends diversified investment operations.
Bitcoin’s inertia of leading the rally should fade away as cryptocurrencies mature
But it may be much later.
As the encryption market gradually develops and matures, Bitcoin and non-Bitcoin coins should gradually drift apart and gradually embark on different paths. In such a future, Bitcoin’s market capitalization share should be getting lower and lower, Bitcoin will be more like a risk asset, and coins other than Bitcoin will be more like a special category of technology stocks, each subject to different The factors that affect the rise and fall will not be as highly correlated as they are now.
Later, we will bring you analysis of leading projects on other tracks. If you are interested, please click follow. I will also compile some cutting-edge information inquiries and project reviews from time to time, and welcome like-minded people in the currency circle to explore together. If you have any questions, please comment or send a private message
