- A Coinbase research shows that investors prefer altcoins during a downtrend in the BTC value.
A Coinbase research suggests that Bitcoin is becoming a gateway for Altcoin world in the sense that the fluctuations in Bitcoin value act as a determinant of how other crypto market dynamics. The research shows that out of the 60 percent people that buy BTC as their first purchase, a whopping 24 percent then switch to other cryptocurrencies.
People consider buying altcoins during a bull run. For example, during 2017 when Bitcoin’s market dominance share went down to 30%, for a brief period of time, ethereum dominated the market accounting for 50% of the trading volume on the Coinbase platform. Chris Martin, a commentator from the Coinbase Corporate Development, citing possible reasons, stated:
“This could be for a variety of reasons, but one is largely psychological. As people feel good about their initial crypto investments (into Bitcoin), they branch out to find other possible categorical winners (as evident in the 2017 bull run).”
Moreover other analysts have observed that Bitcoin acts as a sort of a ‘gateway drug’ to other cryptos. The report further adds how people are turning towards Bitcoin investments amid the declining economy. Moreover, since Altcoins are prized for other services, it seems that Bitcoin is moving closer towards becoming the digital version of gold.
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