Why do Bitcoin and altcoins rise simultaneously? Bitcoin is the first cryptocurrency and it has the highest market cap, recognition, and adoption, and it has the most daily volumes. It was only natural to use it as a reserve currency. This way, all altcoins exchange rates are priced against it. This makes Bitcoin a good choice for use as a reserve currency, but why does it happen?
First, it’s worth noting that Bitcoin’s dominance is at a three-month high. This represents the market capitalization of the entire crypto industry, and a high ratio indicates that more capital is flowing into the original cryptocurrency. But why do Bitcoin and altcoins rise and fall simultaneously? In other words, they follow each other. And when Bitcoin falls, the altcoins follow.
Second, Bitcoin’s price has fallen since the SEC cracked down on crypto exchanges. However, investors who feel nervous about the newer cryptocurrencies might move their funds to Bitcoin during a bear market. This is a very common scenario, and it is worth examining whether this is the case with Bitcoin or altcoins. While bitcoin is the most popular cryptocurrency, other tokens are just as important and have much greater potential to grow.
First, Bitcoin and altcoins share some similarities, including their price moments and market behavior. While their markets are relatively new, financial pros often classify altcoins as alternative investments. While there’s no definitive answer for why Bitcoin and altcoins rise and fall simultaneously, they are often closely related. In addition to being clones of each other, altcoins follow Bitcoin’s underlying premise of using a decentralized network and proof of work mechanism to record transactions.