In a recent blog, The leading cryptocurrency exchange, Coinbase stated that customer behavior supports market capitalization data showing Bitcoin as the cryptocurrency industry’s “blue-chip asset.”
The exchange also claimed that the rising interest in Bitcoin could benefit the entire industry.
The exchange identifies that Bitcoin dominance grows when the market is bearish and shrinks during bull runs. Coinbase reasons that confidence in BTC breeds confidence in the wider industry.
According to a new report from Coinbase, 60% of users buy Bitcoin as their first cryptocurrency purchase, only 24% of investors maintain the Bitcoin faith.
Credits : Coinbase
The reports claim that Majority of Investors consider altcoins during bull runs, such as when Bitcoin’s market dominance dropped below 30% on Coinbase during the ICO craze and Ethereum run in 2017.
For a brief time, Ethereum was the dominant asset traded on the platform with around 50% of the trading volume.
Justin Martin from Coinbase stated that :
“This could be for a variety of reasons, but one is largely psychological. As people feel good about their initial crypto investments (into Bitcoin), they branch out to find other possible categorical winners (as evident in the 2017 bull run).”
Bitcoin’s position as the blue-chip asset is constant. We do see a trend where bull markets show increase in the traction among alternative assets.
Bitcoin is carrying the flag for the entire cryptocurrency market. But the retail preference to branch into other assets shows that new traders and investors enter crypto through Bitcoin.
But generally begin to look for alternative assets and use-cases. In this sense, Bitcoin is also top of the funnel for broader crypto growth.
To the extent, we believe that alternative assets and networks will provide differentiated services beyond the store of value and digital gold as Bitcoin is targeting.
It is necessary for the industry to build support for these other assets as well.