As crypto market experts acknowledge, there is a strong dependence of altcoins on Bitcoin, and this dependence seems to be the key driving force behind shifts taking place on various altcoin markets, such as changes in price, demand, and value and volume of transactions.
In fact, most crypto users must have realized this relationship by now, without having to be crypto experts.
Have you ever heard of the phrase: “When America sneezes, the world catches a cold”?
I think that, in this case, it could be changed to: “When Bitcoin sneezes, altcoins catch a cold”.
The reasons why Bitcoin price changes, etc. have such a dramatic impact on altcoin market figures have already been extensively discussed, and I am not going to add anything else to the discussion.
My own reflection will be on whether and how altcoins can escape Bitcoin’s hegemony and dominance, and exist independently by standing on their own feet, solely relying on their intrinsic value, instead of being affected by external factors, such as Bitcoin price fluctuations.
Altcoins: Cutting the umbilical cord with Bitcoin
In order for altcoins to be able to exist and operate independently in their own realm, rather than simply follow Bitcoin in its steps, they should try to break their inseparable relationship with it, and instead, focus on their unique, intrinsic value each.
I couldn’t overemphasize the fact that no two altcoins are the same.
Based on this fact, i.e. the uniqueness of each altcoin, crypto investors and users can make optimum use of and investment in the virtually countless altcoins available on the market.
It’s like a farmer’s market where apples are sold in bulk, and there is very little differentiation, if any at all, between those apples, other than price and quality, which, again, cannot fluctuate that much, because buyers can readily choose apples that are sold at a lower price or offer better value for money.
Altcoins need to try hard to prove how they differ from other altcoins and Bitcoin itself, just like apple sellers need to show that their apples are somehow different from the apples sold by other sellers.
Each altcoin should be able to establish its own, unique brand that will enable it to differentiate from other altcoins, based on its unique features that will be of unique value to both users and investors.
To achieve this, altcoin users and investors need to get relevant information, education, and training on an ongoing basis, so that they are confident in the true potential of the altcoin that they use or invest in.
As a result, altcoin investors will follow a value investing approach, which in similar to value investing in stocks and shares, thus embracing a more long-term investment strategy, which will further strengthen the intrinsic value of each altcoin, help it differentiate from other altcoins, and break its umbilical cord with Bitcoin.
Sources and further reading
Crypto: Altcoins in free fall, heightened dependence on bitcoin!
Bitcoin Dominance – What it is and How it Affects Altcoins