The cryptocurrency world is still new to many people and investors are still learning the ropes. There are so many interesting trends to take note of and every crypto investor or trader is looking for the best way to make profits. What has been conspicuous is the fact that Bitcoin prices have an effect on all crypto coins. In the recent past, the prices of Bitcoin nosedived and the impact was felt across the entire cryptocurrency market. Many investors are looking for strategies that can help them trade without the risk of losing their investments.
What you need to bear in mind when getting into the crypto market is that the market is heavily influenced by Bitcoin. It will be to your disadvantage to ignore Bitcoin when venturing into crypto trading. So why does Bitcoin have so much effect on what happens on the market? We will look at some of the pertinent issues and help answer the question.
Digital Currency Trends
Bitcoin came into existence about a decade ago and has continued to dominate the cryptocurrency world. From all indicators, this is a solid digital currency and seems to have a considerable amount of market share. Experts indicate that virtual currencies tend to have a similar pattern or trend that they follow. Whereas Bitcoin seems to have suffered a major price decline in recent weeks, it still stands tall among other coins. The prices of the coins are surging and from the look of things, Bitcoin is still the winner in all this.
When you look at the crypto market, you will notice that most coins have taken a similar trend. However, Bitcoin seems to have held its ground and has maintained a significant value throughout. The resilience of Bitcoin is what makes most investors on https://bitcoindigital.io/ trust it as a stable digital currency. As such, when the prices of Bitcoin drop, this could mean even a bigger loss in the other coins.
Why Bitcoin Affects the Entire Cryptocurrency Market
There are a number of reasons why Bitcoin has such a huge impact on the cryptocurrency market. You may have noticed that whatever direction Bitcoin prices go, the other coins follow suit. Here are some of the reasons to explain the trend:
- Bitcoin was the Pioneer Coin
Being the first coin, Bitcoin has shaped the industry a lot and this has cemented its influence on the market. As other coins are being created and introduced to the market, they still depend on the patterns and trends taken by Bitcoin.
- Most Coins are Bitcoin Clones
The altcoins that are being created are clones of Bitcoin and as such cannot enjoy their independence. There are so many versions of coins that have been created and can hardly stand on their own. As such, they are forced to follow the lead of Bitcoin in most aspects.
- Network Security
Having been in the game for more than a decade, Bitcoin has a secure network compared to the other coins. It is estimated that there are more than 18 million miners on the network. This high volume of participants has an effect on the decentralization of the coins and this enhances the security of the transactions.
There are so many other reasons why Bitcoin remains superior in the cryptocurrency market. As a matter of fact, most traders and investors use it as a reserve for their cryptocurrencies. While the market seems to be fluid, Bitcoin brings some level of stability and seems to be the USD of the digital currencies.
In the cryptocurrency market, Bitcoin has the final word and you can only ignore it at your own peril. All experienced investors will keep an eye on Bitcoin even when they are trading with other coins so as to be safe. Where Bitcoin goes, the others will most definitely follow.