Cryptocurrencies have turned into a massive market across the financial world. As a result, so many players have also impacted the market in a big way. With this in mind, it is evident that there are many factors within the market which could change many aspects of cryptocurrencies.
Many cryptocurrency traders are now asking when the next “alt season” may take place, especially those who are trading on digital coins other than Bitcoin. Bitcoin is one of the most traded currencies in the cryptocurrency space, but will this continue to be the case?
Bitcoin has been performing averagely since its 2017/ 2018 crash. This is in comparison with other digital currencies. Nevertheless, the question remains if the market will turn to focus on the other digital currencies in the near future.
Slowing Down of Bitcoin’s Market Over Time
Is it a surprise that the industry’s leader and one of the most omnipresent coins is losing market share? No! This is something that started since the introduction of the alt sector, which has led to the decline of Bitcoin’s percentage compared to the total value of all digital currencies and related digital assets.
New projects have entered the market, and they are taking over specific parts of the market which are out of Bitcoin’s scope. As a result of this, they have grown in popularity as they are able to target and provide purpose in some of the areas that Bitcoin has failed to. This is natural within the alt space.
The dominance percentage chart for Bitcoin clearly shows that its share of the market has continuously declined over time, with the rest of the space being taken over by other players in the market. Nevertheless, this implies that there is continued diversification as well as maturity within the market, which will continue over the next few years.
The Event of 2017
The event of 2017, which reduced Bitcoin’s dominance percentage in the market, led to a serious alt season. When you look at the statistics of that year, it started with Bitcoin having a high dominance early in the year, creating problems for many traders. That is, many users needed access to the network, yet this far exceeded the available space in the blockchain. The main result was that investors started to seek other avenues of transacting in cryptocurrencies.
This is what led to the alt season in 2017.
Due to the congestion issues plus the surging consumer demand, this led to the value of all other cryptocurrencies together rising against Bitcoin. Some of the other digital currencies, such as Ethereum, did so well that they came close to dethroning Bitcoin as the most valued crypto during that period.
Due to the bear market since then, the demand in the crypto market has declined and many investors have turned away from Bitcoin and digital currencies as a whole. The end result has been that the crypto space has now shifted back to its previous trend line.
With all this in mind, it is evident that the current environment may lead to another user demand explosion as witnessed in 2017. This may be caused by Bitcoin’s scaling, which has not been resolved in any way. If sudden spikes in Bitcoins are witnessed, then growth in demand for other crypto can take place and lead us back to where we were in 2017. The result will be a spillover to other digital currencies, which could lead to a flip in valuations, and so the alt season will begin.