To Buy Bitcoin Or Not To Buy, Is The Question

We ended last week’s write-up with a summary of how Bitcoin and Ethereum comfortably outperformed other asset classes between July 20, a global sell-off day, and August 8.

Just as the cryptocurrency appreciation and outperformance against other conventional asset classes – both physical and financial is difficult to ignore, the changing dominance within the crypto space too is becoming difficult to ignore. In today’s analysis we will examine how Bitcoin fared in relation to 5 top ranked Altcoins and what this trend could portend not just for Bitcoin but also other cryptocurrencies.

In the month of June, when most of the top-ranked crypto currencies declined, Bitcoin emerged stronger than the rest with a decline of little over six percent. ETH (Ethereum) had declined by more than 16 percent, BNB (Binance Coin) had lost 14 percent, ADA (Cardano) had given up 20 percent, XRP (Ripple) had dived by 33 percent and DOGE (Dogecoin) had lost 22 percent.

In July, as cryptos recovered, Bitcoin remained the best performer in this pack with a gain of 18.79 percent. ETH had gained only 11.50 percent, closely followed by BNB with 9.97 percent uptick. XRP had added a more modest 5.86 percent whereas ADA continued to decline, by 4.35 percent and DOGE lost 18.06 percent.

August is turning out to be an entirely different story, and Altcoins appear to be challenging Bitcoin’s supremacy. Non-annualized month-to-date return for Bitcoin is just 9.53 percent as on August 11, whereas ADA has added 36.36 percent, XRP advanced 35.06 percent, DOGE appreciated 27.36 percent, ETH gained by 24.76 percent and BNB added 17.45 percent.

Second-quarter trading volumes on cryptocurrency exchange platform Coinbase Global also indicate a change in investor preference. Trading volume by crypto assets showed that share of Bitcoin decreased to 24 percent, from 57 percent in the year-ago quarter, whereas Ethereum’s share surged to 26 percent, from 15 percent earlier. Other cryptocurrency volumes too rose to 50 percent from the level of 28 percent in the second quarter of 2020. For the first half, Bitcoin trading volumes counted only 31 percent of total volume versus 53 percent in the previous half year.

As per bitcoindominance.com, Real Bitcoin Dominance Index that measures bitcoin’s market share within a basket of 12 specified coins, was at 65.78 percent as on August 11, versus 68.99 percent at end of July and 67.34 percent at end of June, implying diminishing Bitcoin dominance.

The opportunity loss of missing the massive rally and the potential to become accepted for mainstream transactions in the near future is exacerbating the crypto acceptance with each passing day. It is not just dominant market leader Bitcoin but the altcoins too have jumped the bandwagon.

As per coinmarketcap.com, BTC is currently at $45,420.28, ETH is at $3,151.24, BNB is at $391.57, ADA is at $1.80, XRP is at $1.01 and DOGE is at $0.2741.

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