In the world of cryptocurrencies, most crypto tokens follow a similar pattern. Thus, when Ethereum took a hard hit, other altcoins joined in with huge losses. While the bearish market is proving hard for the altcoins, the largest cryptocurrency by market cap, Bitcoin manages to swim in between $6000-$6500 range.
As altcoins continue to drop, Bitcoin, at the time of publishing this article, commands more than 50% of the total cryptocurrency market cap. Ever since the Securities and Exchange Commission delayed their decision regarding a Bitcoin ETF, the bitcoin market cap is trending upwards. While the prices of Bitcoin dropped after the announcement, the Altcoins experienced a substantial sink as well and hence the share of BItcoin rose in total cryptocurrency market cap.
While Ethereum and other altcoins are falling, Bitcoin is holding its value much better in comparison. Immediately after the SEC announcement, investors started to sell off digital currencies. Notably, Ethereum dipped to its lowest price in about a year, falling below $300.
Why is Bitcoin stable and Altcoins falling?
One plausible explanation is that crypto investors view BTC as the most stable token at the moment. During this Bear market, many have already done or are planning to transfer their funds from altcoins to Bitcoin.
Another potential factor is the geopolitical environment. The ongoing civil unrest and economic struggles in Turkey. Reports suggest that a huge influx of money is coming into the cryptocurrency market has gone straight to bitcoin. The Turkish Lira has fallen more than 20% in the last few days and many people in Turkey entrust Bitcoin as a more stable store of value their local fiat currency.
Notably, Bitcoin has been relatively successful in the recent weeks. But one can not deny that BTC is still struggling, as it has throughout much of the year. The Turkey scenario raises a question as to what might occur on a larger, global scale during the next significant financial crisis. For crypto enthusiasts and the skeptics, the true worth of bitcoin and altcoins will be discovered in another financial meltdown. Will investors rely on Crypto like the Turkish citizens? Will the investment be predominantly on one crypto BTC or as a group? Or will the digital currencies fall flat along with mainstream economic institutions?