Whenever you hear the word cryptocurrency, the first thing that almost always comes to mind is Bitcoin. Bitcoin being the pioneer cryptocurrency has been in existence since 2009 and its stability and growth over these times has paved way for other alternative coins, also referred to as Altcoins.
Many of these alternative coins are designed in a manner similar to Bitcoin such that whenever there is any significant change in Bitcoins price either positively or negatively, the Altcoins follow the same trend. In addition, other coins that do not exactly have some Bitcoin derivatives still show some similarities in their trend with Bitcoin.
You may have been wondering why that is the case? Well, you have just landed in the best place to find answers to that question. At the end of this article, you would be able to understand the reason for the somewhat dogmatic response of other coins to Bitcoin.
Most often, Bitcoin is referred to as a stable coin because it has overtime proven itself to be stable and has gained the trust of investors. In general, there are over five thousand coins in the cryptocurrency market, yet, Bitcoin holds about 50% of the total market cap. If just one coin holds half of the overall market cap, it would not be surprising to see that any significant change in it’s price would have a push or pull effect on the other cryptocurrencies.
The Crypto Reserve Currency
Experts consider Bitcoin as the reserve currency for crypto because it was the first cryptocurrency and it is also stable. Furthermore, due to regulations put in place in some countries against exchanging cryptocurrency to fiat money, most investors purchase Bitcoin first, then use it in exchanging for other Altcoins.
As a matter of fact, since Bitcoin is the means of exchange for other coins, investors now compare the prices of these coins to it rather than to fiat currencies. Hence, increasing Bitcoins relevance and it’s ability to affect the prices of these Altcoins.
You can readily monitor the graphs of the effect of Bitcoin on these coins. Click on the Bitcoin Loophole login to get started. With this site, you are nothing short of accuracy and security.
Altcoins Similarity To Bitcoin
As stated earlier, most alternative coins are bitcoin derivatives. Take for instance Litecoin. The founder of Litecoin, Charlie Lee referred to Litecoin as Bitcoin silver. Litecoin was deliberately and cautiously made to follow the trend of Bitcoin.
Therefore, if there is a rise in Bitcoin, there would also be a rise in Litecoin. Similarly, it applies in the opposite direction. If Bitcoin experiences a dip, Litecoin would also experience a simultaneous dip. This trend doesn’t just follow for Litecoin only, though it is more evident with it because it is made with Bitcoins codebase, several other cryptocurrencies also have similarities with Bitcoin, hence, it’s influence on other coins.
Bitcoin Has The Most Guaranteed Network
Research has shown that about 19 million miners are involved in the mining network of Bitcoin. A very large volume compared to other coins. This ensures it’s security and stability over time and at the same time, this volume also contributes to it’s effect on other coins
Bitcoin Is The Pioneer Cryptocurrency
One of the other reasons Bitcoin can influence the price of Altcoins is that it is the first cryptocurrency. Were it not for Bitcoin neither these alternative coins nor the crypto industry would not be in existence. It is save to say that Bitcoin is the mother of cryptocurrency and has pulled weight in the industry.
As the pioneer of cryptocurrencies, Bitcoin has steadily and successfully carved it’s name out in the industry and built a strong network around itself such that it can influence businesses, events and even the value of other cryptocurrencies.