Bitcoin was introduced in 2009 and started trading with an attached monetary value in July 2010. At inception, it traded from around $0.0008 to $0.08 per coin.
As the first of its kind, people didn’t know what to expect. It was mainly popular among early adopters and regarded as a bubble by the vast majority of the populace. Slowly, it started getting adopted and incorporated into the finance world. On November 28, 2021, Bitcoin crossed $1 and stayed above it.
However, like all great inventions, competitive versions of it slowly came up. It started with Namecoin in 2011, which was followed swiftly by Litecoin, and then Swiftcoin. Ethereum came to the show on July 30, 2015, and brought some innovative concepts with it. These competitive cryptocurrencies have come to be known as Altcoins in general.
BITCOIN VS ALTCOINS CORRELATION
Being the pioneer cryptocurrency, Bitcoin is regarded as the first mover because its price movements always affect the whole cryptocurrency market in general. This effect is measured in ‘Bitcoin Dominance,’ a term used to describe the ratio of the total crypto market cap comprised of Bitcoin. As of writing, this ratio sits at 43.91%
The Bitcoin Dominance metric is used to anticipate Altseason (a period when the value of altcoins rises exponentially relative to Bitcoin.) It usually happens when Bitcoin Dominance is at its lowest, and Bitcoin’s value is in a range after reaching a peak price.
HISTORICAL DATA – WHAT HAPPENED WITH ALTCOINS WHEN BITCOIN CRASHED?
Over the years, Bitcoin has suffered some pretty nasty crashes. The earliest big crash was in June 2011, when Bitcoin tumbled from $32 per coin to a measly $0.01. That crash affected only Bitcoin as there were no Altcoins on ground then to share in its misfortune.
Fast forward to April 2013, when Mt. Gox was hacked again and effectively forced to close down. Bitcoin suffered the effects again, but this time, the slumbering giant brought down a host of Altcoins with it as it tumbled from $260 to $50. The most notable among them was Litecoin which suffered a drop from its previous ATH of $44 and finally hovered around $4 at the end of the year.
Since then, any steep drop in Bitcoin’s price always elicits an even bigger reaction from altcoins. Take Ethereum, for example. When Bitcoin lost 84% of its value from $20,000 to $12,000 between December 2017 – December 2018, Ethereum suffered an attendant loss going from $445.21 to $113.4.
The same happened in March 2020, when Bitcoin lost more than 50% of its value at the onset of the pandemic. It also happened in May 2021 when a 53% drop in Bitcoin’s value caused Ethereum to drop from its high of $4459 to below $2000.
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CAN WE EXPECT A CHANGE IN THE FUTURE
We live in different times now. More people are paying attention to cryptocurrencies. Truth be told, there are Bitcoin maximalists among them who believe that Bitcoin is the only true cryptocurrency and will continue to outperform other coins into the foreseeable future. However, they are getting few and far between.
The majority of the crypto world now believe that there are altcoins that have proved their value and can coexist with Bitcoin into the future. Foremost among them is Ethereum, which impressively accounts for 19.43% of the total crypto market cap with over $514B in worth.
Apart from Ethereum, other coins have shown potential and have racked up their fair share of the total crypto market cap. Coins like Cardano(ADA), Solana(SOL), Polygon(MATIC), among others. In addition, the crypto ecosystem has diversified more with NFTs, Play to earn games, Staking, Lending, Borrowing, Saving, etc., taking up portions of this big cake
Those developments have reduced Bitcoin’s influence on the entire market, and there will still be more of them because the crypto world is one of the innovations. Therefore, even if Bitcoin suffers a crash, it will likely not take down as much of the market as it would have in years past.
FREQUENTLY ASKED QUESTIONS
Will Ethereum go up if Bitcoin crashes?
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That hardly seems likely. Even though Ethereum is a worthy cryptocurrency on its own, it is still affected by Bitcoin’s mood swings. Thus, a future in which Bitcoin co-exists with Ethereum is more likely than one in which Bitcoin crashes, and Ethereum survives.
Is Ethereum affected by Bitcoin’s halving?
Well, indirectly, it is. Consider the reason:
Bitcoin halving is a 50% reduction in a coin’s mining rate and the rewards doled out per block. It occurs every four years and reduces the supply, consequently bringing an attendant increase in the price of Bitcoin.
There have been three halvings for Bitcoin so far. In 2012, bitcoin rose from $4 to $13 after its first halving. The second halving took place in 2016 and eventually drove Bitcoin’s price up to its previous ATH of $20,000 at the end of 2017. Lastly, there was another halving in 2020, and Bitcoin reacted by rallying to another ATH of $64,000.
Having established that, it’s safe to say that Bitcoin’s halving eventually causes an increase in its price. As for Ethereum, whatever is good for the goose is good for the gander. Therefore, an increase in Bitcoin’s price will likely cause Ethereum to shoot up in value too.
Does Ethereum replace Bitcoin?
They are two sides of the same coin. Bitcoin is more suited as a currency token, while Ethereum is a utility token. Therefore, they are complementary coins that will likely coexist instead of replacing each other.
Can Ethereum hit $100K?
Currently, Ethereum’s price is hovering around $4,500. To get to $100K, it would have to do a 2500% price increase. Given that more attention has been focused on the crypto world recently and that its long-awaited upgrade(ETH 2.0) is on its way, it may very well hit that price.
When will Bitcoin crash again?
No one knows for sure if or when that would happen. However, with the level of institutions that are buying and trading Bitcoin, it seems highly unlikely that Bitcoin would suffer a severe crash in price again.