Though in the past few weeks Bitcoins price is falling but dominance has seen some growth factors by almost 10%. As per Recent reports, some of this could be due to the sheer number of failing ICO’s over the past months. With ICO’s failing, are more people turning to major coins such as Bitcoin, Ethereum, Litecoin etc for their investments.
As per CCN reports:
“In May, the dominance index of bitcoin was at around 35 %, during a period in which the crypto 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 %.”
Of-course, failing altcoin ICO’s 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.
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? Let’s hope for the best in future to come.