As Bitcoin dominance reaches 65%, the future of altcoins is questioned

There is a subtle shift occurring within the crypto-verse. While Bitcoin continues to excel, blasting through resistance and ascending once more into 5-digit status, altcoins as a group are being left in the dust. In the past, the leading digital currency would gracefully hand over the baton, so to speak, while it consolidated its winnings, and then a rally would take place in the riskier programs in Crypto-Land. Such has not been the case of late. This correlation has broken down. An altcoin rally is nowhere to be seen.

Something has obviously changed in the background of crypto demographics, as Bitcoin has now reached a 65% plateau, after having dipped as low as 35% back in January of 2018. 2017 was the heyday for alternative token development programs. Anyone with a logical whitepaper and the wherewithal to put together a convincing Initial Coin Offering (ICO) campaign could have uninformed investors throw money at them and lots of it. It was very reminiscent of the early Internet age, but a possible reckoning is now in order.

The above chart, courtesy of Coinmarketcap.com, tells the story. From early 2018, Bitcoin has gradually recovered lost ground at the expense of its altcoin brethren, but as one reviews the journey, there were several periods where Bitcoin actually pulled back. During those brief periods, altcoins got a chance to play “catch up”, if you will, an indication that the tolerance for risk had expanded within the investment community.

A report from Binance Research, the analytical support department attached to the Binance crypto exchange, for the second quarter was the first evidence that the recent surge in Bitcoin fortunes might be breaking previous correlations. As reporters noted: “Second quarter data reflected a correlation coefficient of 0.61, as opposed to a 0.73 figure for the first quarter. Analysts attribute this drop to a supposed “culling of the herd”, as the market evaluates various “use cases” in a survival…

Source Link