Though the price of Bitcoin has fallen over the past few days, Bitcoin’s dominance has seen some growth. In fact, in just two months, the growth of Bitcoin has risen by almost 10%. Recent reports now find that some of this could be down to the sheer number of failing ICO’s that have surfaced over the coming months. With ICO’s failing, are more people turning to established coins like Bitcoin for their investments?
According to CCN:
“In May, the dominance index of bitcoin was at around 35 percent, during a period in which the cryptocurrency market initiated a large corrective rally to previous support levels. However, as hundreds of ICOs died out and the bear market came about, the dominance of bitcoin started to rise. From May to July, within a two-month period, the dominance of bitcoin rose by 7 percent.”
See more from CCN for yourself, here- https://www.ccn.com/as-hundreds-of-icos-fail-bitcoin-gains-more-dominance-over-the-market/
Okay so of course, failing ICOs will not totally influence the dominance of Bitcoin. However, what these ICOs are doing is pushing the community away from ICO investment and thus, are encouraging them to invest in established currencies. As Bitcoin is the market leader, many people naturally turn to Bitcoin which in turn is boosting its dominance. Think about it this way, as a new investor looking to invest in cryptocurrency, you could turn to an ICO, its new, its attractive and it could be fruitful. Then you see news about failing ICOs and various other problems surrounding them. You’re left with two choices, continue to invest or invest in something that you know is secure and that cannot fail. This is where Bitcoin comes in.
As ICOs fail and fall out of the markets, the number of currencies decreases and thus, Bitcoins share of the market increases.
That is at least the premise of what I think CCN are trying to report at least. Overall, it does seem to make sense, right?
Furthermore, according to CCN:
“At this phase of the market wherein hundreds of new tokens and cryptocurrencies are being created on a monthly basis, the dominance index of bitcoin is a consistent indicator about the state of the market. Usually, when the dominance index of bitcoin is low, the market is in a bear cycle and when the dominance index of bitcoin is high, the market enters a bull market.”
With this in mind, based upon current and historic trends, perhaps the new rise in Bitcoin dominance may see us enter a new bull market? Whilst we can’t guarantee this, CCN do seem confident that this may be the case!