Topic: Bitcoin Dominance rising again. What is happening? - page 5. (Read 2122 times)

According to PlanB, as you can read on my June Report, halvening isn't having any measurable impact on Litecoin price, as opposed of what is happening for bitcoin.
Regarding the Litecoin overperforming BTC, welol, I can't see all this evidence

And if we compare the recent bottoms of both coins (i.e. 22 dollars vs 3300), Litecoin is still outperforming Bitcoin overall. And this remains true even if we take into account that Litecoin has been losing to Bitcoin last weeks. Actually, with Litecoin halving coming in a couple days, it will likely surge again (and this surge may have already started, by the way). To sum it up, not all altcoins are born equal

So, as long we disagree on the premises of the reasoning (to me LTC is a all round shitcoin,for you it has validity as "Bitcoin Testbed") , we agree on the consequences (LTC is rubbish).
Well, it's a start!

Except Litceoin massively outperformed the rest of the altcoin market recently. Look at the December-March period where it totally outperformed Bitcoin, too. This is the reason people started speculating the bull run was being driven by the LTC halving, because LTC's momentum was so strong.

As it turned out, too many people bought into the halvening hype and it didn't play out, but LTC was a great hold through Q1.

According to PlanB, as you can read on my June Report, halvening isn't having any measurable impact on Litecoin price, as opposed of what is happening for bitcoin.
Regarding the Litecoin overperforming BTC, welol, I can't see all this evidence:



Long gone are the days when LTC was "silver to Bitcoin Gold" or "Testbed for Bitcoin".
Now LTC is like every other shitcoin.

I'm pretty sure Litecoin will still be a testbed for Bitcoin and for that reason enjoy some degree of popularity, but it's definitely not the 'Silver' to Bitcoin, and it never has been. It was something made up by those supporting Litecoin to make it look cooler than it actually is.

In the end, Litecoin's all time charts are ugly af. It's extremely bearish when you 5 years later dump far below your 2013 high. Solid indication that you're dealing with rubbish here.

Long gone are the days when LTC was "silver to Bitcoin Gold" or "Testbed for Bitcoin".
Now LTC is like every other shitcoin.

I guess Litecoin is still there

And if we compare the recent bottoms of both coins (i.e. 22 dollars vs 3300), Litecoin is still outperforming Bitcoin overall. And this remains true even if we take into account that Litecoin has been losing to Bitcoin last weeks. Actually, with Litecoin halving coming in a couple days, it will likely surge again (and this surge may have already started, by the way). To sum it up, not all altcoins are born equal

that is something that the newcomers who are now bag holding tons of different altcoins in their so called "portfolios" don't want to accept. some time ago someone posted a screenshot of coinmarketcap website that belonged to a couple of years ago. it was funny to see the "top" coins of that time and how they were hyped up so much and people were thinking they all are going to live side by side of bitcoin and there were even talk of "replacing" bitcoin! that list doesn't look anything like today's list but people still have the same expectations

CM Bletchley Indexes (CMBI) Insights
Correlation charts can provide interesting insight into the expected price relationship between assets. A correlation of 1 or -1 implies a perfect positive or negative relationship between two assets. Through assessing the correlation of Bletchley assets we can derive insight into how the market has been behaving.

During the bear market of 2018, generally speaking, much of crypto was correlated with Bletchley Indexes all having a correlation score >0.9 (i.e. If any of the Indexes increased, the most likely scenario was that the others increased as well, the same can be said for a decrease). However, since the beginning of the year Bitcoin has continually outperformed most of its peers. Since the Bletchley 10 is comprised ~70% of Bitcoin, the performance of the Bletchley 10 has outperformed the Bletchley 20 and Bletchley 40. Additionally, the level of correlation between them has reduced to around 0.7. This demonstrates a lower relationship between the price movement of the Bletchley 10 with the Bletchley 20 and Bletchley 40. However, more recently there is a flattening and even a slight increase in correlation, potentially signalling an improvement in short term strength for mid and low market cap assets.

Bitcoin Outperformance Driven by Regulatory, Geopolitical, and Macroeconomic Factors

Several narratives explain the strong relative outperformance in bitcoin over this period:

Although there have been few public announcements by U.S. regulators, the body of evidence that U.S. regulators are exerting more pressure on market participants continues to grow. Earlier this year, Poloniex, Bittrex, and Binance all took steps to restrict U.S. traders from participating in certain markets. In June, the SEC filed a lawsuit in connection with Kin’s token offering in a clear indication that the SEC will be unyielding in its interpretation of existing securities law. The CFTC has also begun an investigation into BitMEX and whether it has allowed U.S. investors to trade on its platform.

U.S. Treasury Secretary Mnuchin recently stated in a White House press briefing that he had “very serious concerns” about cryptocurrencies and stated that crypto businesses must comply with the Bank Secrecy Act and register with the Financial Crimes Enforcement Network. And Facebook’s launch of Libra has sparked congressional scrutiny with two separate Senate committees holding hearings about Libra and cryptocurrencies.

The net impact of these events is to drive crypto capital towards Bitcoin, which thus far has the most regulatory clarity.

Additionally, heightened geopolitical tensions and a growing acceptance that Bitcoin serves as a digital store of value and hedge in uncertain times has provided support. The recent increase in geopolitical risk has been driven primarily by the U.S.-China trade dispute, but also by the increased threat of disruption of global oil supplies in the Middle East, the resurgence of Eurozone fragmentation risk (particularly increased risk that Italy may leave), and growing tensions in Hong Kong.

The correlation between Bitcoin and gold has been particularly strong over the recent past as investors increasingly seek haven assets. Gold recently has exceeded key technical price levels and reached a six-year high.

Lastly, the macroeconomic environment has decisively shifted over the past several months in the direction of more monetary easing. Specifically, real interest rates (inflation-adjusted interest rates) have come down across the board in major developed world countries and across most durations. Pockets of weakness in forward-looking macroeconomic indicators have increased market participants’ expectations of a recession and combined with the dramatic shift in forward guidance by major central banks, interest rates have sharply declined. It now seems nearly certain that the four major central banks of the world (the Federal Reserve, the European Central Bank, the Bank of Japan, and the People’s Bank of China) are on the cusp of another monetary easing cycle. As real interest rates decline, the opportunity cost of holding non-yield producing assets like Bitcoin declines. Moreover, since many short-term interest rates around the world are close to the effective lower bound, central banks will once again have to consider the use of quantitative easing and other unconventional monetary tools that risk long-term instability.

Although the empirical evidence around Bitcoin’s reaction function to changes in future monetary policy and expectations in growth and inflation is mixed, on balance, this factor should provide further long-term support to Bitcoin prices.

The most recent bear market exposed a lot of ICOs and alternative e currencies. I know of a number of reputable ICO/STO managers who pulled out due to lack of credible projects. Only the projects with actual products and use case survived.

Also, from a fundamental standpoint, perhaps the implementation of LN had something to do with it as well. Scalability was a huge reason why people were inclined to use alts, but with that issue somewhat tackled, the demand for these alternatives isn't there as much.

In the 2013 and 2017 bull markets, altcoins rallied massively during the final 2-3 weeks of Bitcoin's bubble. That's when euphoria is occurring. No one is selling their BTC for dollars anymore, and everyone is pouring it into riskier investments.

The altcoin markets will probably wait at least until BTC reaches a new ATH to start getting interesting. That's when the Ethereum/ICO bubble started in early 2017, after Bitcoin reached a new ATH and corrected.

The fact that this is the start of a bull market, and we are nowhere near euphoria yet. People are still very risk averse, and given that fact, they default to investing in BTC which they deem as the safest crypto asset (sort of like T-bills in the bond market).

Conventional wisdom would have told you that as the bull market progresses, you would see bitcoin dominance decrease due to the fact that people like to take risks while markets are bullish. I think that the two main reasons that this is not happening as follows.

1. As you mentioned, institutional money. They are more inclined towards investing in BTC because it is the most stable, most long term proven crypto. Anything else for them with a smaller market cap would simply be too little liquidity. Market anticipation of this kind of institutional interest occurring is probably a self fulfilling prophecy in of itself.

2. The fact that this is the start of a bull market, and we are nowhere near euphoria yet. People are still very risk averse, and given that fact, they default to investing in BTC which they deem as the safest crypto asset (sort of like T-bills in the bond market).

Also, from a fundamental standpoint, perhaps the implementation of LN had something to do with it as well. Scalability was a huge reason why people were inclined to use alts, but with that issue somewhat tackled, the demand for these alternatives isn't there as much.

Market dominance is a shitty indicator, we all know why: it is based on market prices. After Bitwise report, where we learnt that many exchanges faked volumes, and ultimately prices themselves, we cannot ignore anymore those flaws.
Still dominance can point in the right directions to intresting thoughts about markets in a broader way.

Market dominance just broke the peak during Dec '17 (price) ATH, and at 65,2% it is now at the highest levels since April 2017.

I agree with this reason, and I think this is maybe one of the most important reason why bitcoin dominance is so high, and altcoins do not follow king of crypto as was the case in the past. Many investors are burn too much money with altcoins, and they see that only bitcoin is crypto with purpose. There is a saying “Fool me once, shame on you, fool me twice, shame on me.”

Even if institutional money is leading with Bitcoin there's a whole world of saps out there who'll swallow the 'next Bitcoin' narrative no matter what's actually screaming in their face.

The truth is simple - altcoins were in a bubble, much bigger bubble than Bitcoin was, realistically there's no way more than a dozen of coins can co-exist - the point of money is to be universal, so just like the US dollar is welcomed everywhere in the world, Bitcoin is the king of crypto. Tons of altcoins were claiming that they will dethrone Bitcoin, but when investors started realizing that it was a lie, those coins started losing their value.