Why Are Altcoins Falling Faster Than Bitcoin?

 In the digital currency space, it's normal for several coins and tokens to maneuver in similar patterns. When Bitcoin (BTC), the most important cryptocurrency by market cap, goes up, other digital tokens tend to extend in value also. When BTC declines, it's likely that other players within the space will drop at an equivalent time.



In recent weeks, as many cryptocurrencies have fallen even further in what has already been a troublesome year thus far, this pattern has held. However, as a report by Zycrypto.com indicates, something interesting has been happening: Ethereum and other altcoins are hit harder than bitcoin, overall.1 Why is it that altcoins are suffering more significant losses than the highest digital currency?



Bitcoin ETF News

The report indicates that bitcoin has commanded quite 50% of the entire cryptocurrency market cap in recent weeks.1 One important turning point for the crypto space was the announcement that the U.S. Securities and Exchange Commission (SEC) would delay any announcement of a choice regarding the approval of a cryptocurrency exchange-traded fund (ETF) until the top of September.2 While this announcement, which happened earlier in August, spelled trouble for all digital currencies, it seems to possess had a longer-lasting and more significant impact on Ethereum and other altcoins.


While investors sold off digital currencies following the SEC announcement, bitcoin was ready to hold its value better than other coins. Ethereum dipped to its lowest price in a few year, falling below $300.

Comments

Post a Comment

Popular posts from this blog

Limited Concurrent Transactions

  The Bitcoin block system requires connection and confirmation from the peer-to-peer network to be verified. Because each block contains a limited record of transactions and an upper limit to the number of new transactions that can be written, there’s a limit to how many people can buy and sell with the system at any given time. As more and more vendors and individuals use Bitcoin to do business, the number of transactions per second increases, and the peer-to-peer network is becoming congested, with some operations without transaction fees taking hours to clear. Whereas conventional payment systems like credit cards can simply expand their connections and processing power to speed up processing, the isolated peer-to-peer nature of bitcoin doesn’t allow it to scale with the global financial system. Black Market Appeal A central principle to the design of the Bitcoin system is that there is no single transactional processing authority. As a result, no single user can be locked out o
Read more

Bitcoin Mining Has Diminishing Returns

  A few years ago when the Bitcoin system was new, individual users “mined” for new Bitcoins at a rapid pace. Bitcoin mining software used local processors, and even extra processors like a computer’s graphics card, to calculate hashes for the next block in the blockchain. While the number of people using and “mining” Bitcoin was low, each user doing the mining would randomly confirm the next block at a higher pace, generating new Bitcoins for his or her account quickly. But this boom in generation couldn’t last. The Bitcoin system is designed to make each new block more difficult to find than the last one, reducing the number of randomized Bitcoins that are generated and distributed. That means that as time goes on, each individual mining for them has to work harder and harder (in a figurative sense—it’s the computer that’s working harder and using more electricity, and thus, costing more conventional money). As the number of individual Bitcoins grows, the amount of Bitcoins rewarde
Read more