Bitcoin Surging & Altcoins Withering, is the bubble going to burst?
Bitcoin continually keeps surging in its valuation, for the last five months, it’s grown from $3,130.00 to $13,00000. However, Bitcoin saw a small decline last month, which allowed for the Altcoins Withering to have a fresh of breath air. This has allowed for the coin to surge slowly, benefiting from investors that aren’t comfortable with BTC. The bubble burst for Altcoin has yet to occur though, leading advocates of the coin to wonder if the currency will indeed surge in the future.
Currently, Bitcoin is the leading cryptocurrency worldwide. It phases through industry resistance weekly, becoming the worlds most crucial crypto asset for investors. As such, the surge for BTC hasn’t been just in its valuation but also in its popularity. Today, it holds 65% of the market share dominance for the global crypto markets. Many analysts suspect that the previous crash of 2018, where market share dominance dropped to 35%, will never occur again.
Multiple firms saw the upcoming changes in Bitcoins market share. The 1st though was A.T. Kearney, a management consulting firm operating on an international level. During last December the firm predicted the following; “By the end of 2019, Bitcoin will reclaim nearly two-thirds of the crypto-market capitalization as altcoins lose their lustre because of growing risk aversion among cryptocurrency investors. More broadly, financial regulators will soften their stance towards the sector.”
The significant rise of Bitcoin’s share dominance has caused for numerous analysts to debate about the valuations of cryptocurrencies, are they to overprices? And are Altcoins in a bubble that will burst soon? The last time this discussion was had was back in 2014, right before Bitcoin was able to have its bubble burst. Analysts sceptical about bitcoin back then declared that it was impossible for BTC to reach sustained heights. It wasn’t until 2017 that the bubble finally burst for Bitcoin, but the sceptical individuals out there ended up being wrong. This could very well be the case with Altcoins; the sceptical analysts could end up finding themselves regretting their statement. Altcoins could all to realistically have its bubble burst in the next twelve months but will inevitably have its value drop significantly.
Right after Bitcoin had its bubble burst in 2018, there was a “Crypto Winter”, where cryptocurrencies had trading volumes drop significantly. Those sceptics from 2014 indicated four years later that this winter was the end of the bubble. Low and behold, today, the market space is a considerably different picture. There are multiple new factors at play that’s significantly changing the landscape of the financial markets. Companies like JPMorgan, Facebook and PayPal have begun working on their own cryptocurrencies. The JPM Coin is close to launching, as is Facebook & PayPal’s Project Libra. This will cause for renewed interest on a global scale for the crypto industry, with valuations expected to soar dramatically. However, analysts anticipate that Bitcoin will benefit from the industries growth and that Altcoins will eventually cease to exist.
Peter Brandt, a cryptocurrency analyst and commodities expect stated: “I believe that the advance in late 2017 and early 2018 in Altcoins Withering will prove to be bubbles. I am of the firm belief that 95% of Altcoins Withering will eventually be worthless and that BTC will occupy 80% to 90% of the total market cap of cryptocurrencies. No doubt several of the altcoins and micro-cap coins will find utility in specialized niches. It remains to be seen which coins these will be.”
Mr Brandt isn’t the only one who believes this will be the result for Altcoins. Max Keiser, a notable supporter of Bitcoin, stated: “Look, the dominance index is at 60% again, and it’s going back to 80% or 90% because that’s the only logical place for anyone who wants to be in crypto to be. But the short answer is, in my view, the altcoin phenomenon is finished.”
The Cryptocurrency Bubble Debate
The fierce debate about crypto valuations is never going to end amongst analysts. This is because digital assets aren’t regulated like traditional assets. Strategies and programs used by regular traders aren’t available through digital investing. Regardless, advocates in the cryptocurrency space have defended the valuations and the nature of these currencies. It appears the Wall Street & Big-Name corporations are listening. Crypto will inevitably be integrated into everyday society and will become successful on a level that nobody can predict.
There is still some debating on if investors are going over the line by overpricing the valuation of Bitcoin & other cryptocurrencies. Are these traders creating a bubble that could result in a backlash when crypto is integrated into society? The answer is debatable. There will be some that will opt-in to purchase a bitcoin still, but the majority will shy away from the fact that a single bitcoin costs $13k. Reporters, Traders, and Analysts have all publicly spoken about the situation.
Former BBC & ITV Television Reporter, Glen Goodman, who now focuses on crypto reporting stated: “Crypto markets are largely driven by speculation, but that doesn’t mean they’re currently in a ‘bubble’. Classic speculative bubbles are characterized by euphoria and the mass-involvement of ordinary people who believe they will soon become rich. We saw that phenomenon in late 2017. I sold my crypto holdings shortly after, and waited for the bubble to deflate fully, which took about a year.”
Goodman concluded his comments by stating: “As we saw with Netscape, AOL and AltaVista in the early Internet era, it isn’t necessarily the first-movers in a new industry that end up the biggest successes. Perhaps even Bitcoin itself will be usurped by something faster and even more ingenious. A household brand name like Bitcoin is a valuable thing, but it does not make a brand bulletproof. Just ask Nokia. Or Blackberry. Or Kodak. Or Blockbuster. Or Toys ‘R’ Us.”
Crypto Social Media Influencer, Josh Rager, spoke about the market by saying: “The cryptocurrency market isn’t a bubble, but I do believe we saw a bubble with ICOs, and crypto assets not backed by solid fundamentals. In 2017 all you had to do was put together a small team, build a website and have a white paper to be considered a potentially valuable company. But as we saw, most of these companies ‘run out of funds’ by the end of 2018 and their assets were dumped on exchanges.”
Rager continued his comments by stating: “The psychology of 5-digit Bitcoin over $10,000 has already set in, as we saw sub-$10k prices were quickly bought up over this past week. Bitcoin and crypto miners seem to be holding on to more Bitcoin because they’re profitable once again, so there is a lack of selling pressure from miners overall. Not to mention all the new instruments for Bitcoin and the crypto market, including BAKKT and institutions getting into the market more. And even Ledger was recently approved to offer physically settled Bitcoin Futures to retail investors. All these signs show me that the market is maturing and we’re not in any mania.”
Max Keiser laughed when asked if the market is in the bubble, he stated: “Bitcoin is virtually the only financial asset not in a bubble. Sovereign bonds are in multi-hundred-year bubbles. The USD and various fiat money are in historical bubbles. Stock markets are in bubbles. Most property is also in a bubble. Gold and gold mining stocks are undervalued and good places to invest, but their upside is limited as compared to Bitcoin.”
Max Keiser also believes that the Altcoins Withering phenomenon is over and that Bitcoin will decimate the existence of this coin in the coming twelve months. However, there are always going to be people who agree and disagree with the future of the cryptocurrency industry. The debate will never end until either one of these coins is disappointed in the crypto markets. Considering that Bitcoin has a valuation that’s nearly 10x higher than that of an Altcoins Withering, it will most likely be that coin that is phased out by low popularity and valuations.
Max Keiser finished his statements by saying: “In ten years, we’ll see Bitcoin, and a bunch of coins that don’t exist now; the new crop of seedlings that start with promise, then fade away.”