Bitcoin dominance continues to reach new highs, but what about altcoins?

The accusation that "cryptocurrencies are all bubbles" is not unfamiliar to the crypto market. However, Bitcoin continues to evolve. This article presents the contrasting views of many experienced traders, focusing on the future trends of Bitcoin and altcoins.

In 2014, mainstream media pointed to the impending burst of the Bitcoin bubble, with many pessimistic predictions in financial reports that year. Despite not ending in 2014, this did not stop experts from abandoning the term "bubble" after their predictions of "Bitcoin's death" failed.

Over the past three months, the price of Bitcoin has increased by approximately 128%, while Ether has only risen by 81%. As the exchange rate between altcoins and Bitcoin continues to decline without keeping up with Bitcoin's growth, Bitcoin's market share continues to reach new highs this year. This has sparked discussions on whether "altcoins are heading towards a bubble."

The End of the Altcoin Phenomenon

Seasoned trader Peter Brandt claims that the recent strong rebound of Bitcoin will not be replicated by other cryptocurrencies and compared altcoins to the dot-com bubble of 2000 in a tweet. He predicted in an interview that most altcoins will disappear shortly:

I believe the rise of altcoins in late 2017 and early 2018 will prove to be a bubble. I firmly believe that 95% of tokens will eventually be worthless, and Bitcoin's dominance will reach 80% to 90%. Some altcoins will find practical value in specific markets, but this remains to be seen.

Bitcoin long-time supporter Max Keizer also expressed a similar view in a recent CNBC interview, stating that altcoins will not experience the same surge as Bitcoin this year, and most will disappear:

Bitcoin dominance will return to 80% or 90%, plain and simple: the altcoin phenomenon is over. Bitcoin is actually the only "financial asset" that is not in a bubble. Including sovereign bonds that have been in a bubble for hundreds of years, the US dollar, various national currencies, stocks, and most real estate are also in a bubble. While gold and gold mining stocks are undervalued and good investments, their upside is limited compared to Bitcoin.

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The Future of Altcoins

Some cryptocurrency traders generally agree that Bitcoin's dominance may continue to rise in the coming months but do not believe that altcoins will disappear. Trader Josh Rager stated in an interview that other cryptocurrencies provide "value propositions not covered by Bitcoin" and are performing well:

Bitcoin dominance is approaching 65%, but when we see the decline in Bitcoin's dominance, other cryptocurrencies could benefit from funds flowing into fundamentally strong altcoins. Not to mention many cryptocurrencies with solid technology that will launch by the end of 2019.

British trader and writer Glen Goodman shared a similar view, stating that some altcoins have a technological advantage over Bitcoin and are unlikely to lead to a bubble:

For market share, Bitcoin may be the most rational cryptocurrency asset because it has the highest potential for mass adoption in the future. The technical innovations of altcoins also show tremendous potential and value, but if the technology is not adopted, it is worthless. Therefore, the price of altcoins is based on the assumption that the technology or product will be adopted by the public someday.

Lou Kerner, a partner at CryptoOracle, also stated that most altcoins may be severely overvalued, but projects like Chainlink have the potential to be very valuable.

Conclusion

Overall, both sides agree on the view that altcoins are overpriced and Bitcoin's dominance is rising, but there is a divergence on whether altcoin prices will stabilize. Among traders who deny that altcoins are in a bubble, there is a consensus that "overpricing may occur, but it does not mean that a crypto bubble is happening."

Traders see this as a non-issue because bubbles and hype are part of capitalism and are necessary conditions for building market foundations.

Further Reading

• Ethereum ranked first in the latest cryptocurrency rating
• Kraken CEO: Bitcoin price driven by real demand, not Tether manipulation

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