Bitcoin Benefits from Run on Alt-Coins

Bitcoin Benefits from Run on Alt-Coins


We asked in a previous post to what extent Bitcoin is defining the crypto-currency eco-system. A healthy crypto eco-system, we have always maintained, is one where alternative crypto coins generally strike out on their own and demonstrate a streak of independency when it comes to their own price evolution with respect to Bitcoin – or indeed any other coin for that matter.

Revised Picture

The conclusion of our previous article was that there is a mixed picture. Occasionally we see Bitcoin and Alts rising and falling hand-in-hand. At other times, we see them adopting non-aligned behaviours in terms of price performance. This, we speculated at the time, may have been a sign that an independence streak was potentially emerging.

That was, in part, backed up by CoinMarketCap’s own statistics which reveal that Bitcoin’s weight within the crypto-universe has been steadily dropping  from a historical level of around 90% to roughly 50% today (see chart below), an accelerated downward trend that was largely explained through the exponential growth of Ether and a handful of other coins that began to spike in July 2017.


Bitcoin – % weight of Crypto Universe

CoinMarketCap Crypto Weights               source: www.coinmarketcap/charts


Block 494,784

However, the picture painted by the upcoming Segwit2x Bitcoin hard fork in November now suggests that the non-aligned price performances can largely be explained by herd-like swings in positions between Alts and Bitcoin and vice-versa.

According to the theory, the recent upswing in Bitcoin’s price is largely a result of the upcoming Block 494,784 Segwit2x hard fork. A similar fork occurred on August 1st 2017, resulting in the creation of Bitcoin Cash and what amounted to a resulting USD $10 bn free payout to Bitcoin holders of the time.

Speculators, it appears, are hoping for the same outcome in November. The result has been a vigorous recovery once more in the Bitcoin price (c. $4890 as of writing), and a dramatic fall in prices across practically the entire Alt Coin Universe as can be witnessed from the chart below: Bitcoin price performance is indicated in red, Alt Coin aggregated price performance indicated in blue:

Bitcoin vs AltCoin Price Performance           source: ICO-Examiner (graph)  / CoinMarketCap (data)


As can be seen from the graph, Bitcoin’s price performance has largely been hand in hand in recent weeks with the Alt Coin Universe. That situation, however, has been changing since the beginnng of October, likely as a result of the upcoming Segwit2x change-over.

There are two obvious conclusions. The first is that Alt Coins are currently experiencing a process of mass under-evaluation. The exception is Ether which is perhaps an example of a rare case where we see a Crypto being priced on its own merits.

The second conclusion, and somewhat worryingly at least for those who are keen to see the Crypto phenomenon and its corresponding technologies grow and thrive, is that Bitcoin looks set to dominate the agenda for the entire Crypto universe for the foreseeable future.