Despite Bitcoin dropping
below 50% of total cryptocurrency market cap for the first time, the dominant virtual currency has continued to soar this week, breaking above $1950 this morning (as the dollar drifts lower).
Bitcoin is now up 110% against the dollar in 2017…
And this comes as Bitcoin loses its dominance. As the first of its kind to emerge, bitcoin has become synonymous with “cryptocurrency”. But lately it’s been joined by a lot of others – which together now account for more than half of the cryptocurrency ecosystem:
For First Time, Bitcoin Accounts for Less Than Half Of Market Cap Of All Cryptocurrencies
(Forbes) – For the first time, Bitcoin’s market capitalization as a percentage of all cryptocurrencies has dropped to below 50%.
It is a symbolic turning point for the first cryptocurrency, which for a long time accounted for more than 90% of the value of all blockchain-based assets combined, particularly through a period when so-called alt-coins that were only minor tweaks to bitcoin proliferated.
Its market capitalization then comprised over 80% of all cryptocurrencies for years, a range that held true until two months ago when it dipped below 80% and not only did not recover but did a quick dive straight down.
Several factors are driving the drop from its status as the clear leader.
1. Bitcoin’s development is stalled.
A more than two-year-long saga has left progress on its network stymied. With the various factions unable to compromise and no clear method for moving beyond the impasse, the network has been stuck staring down the same question of how to expand the network to accommodate more transactions that it first faced in early 2015. Meanwhile, as no decisions get made, transaction fees have risen from about 11 cents a year ago to $1.70 now, and the time to confirm a transaction has nearly doubled to almost 20 minutes. Because the community has been unable to resolve its divisions, some of the technological advances people were excited to see on bitcoin will be adopted on other tokens, such as Litecoin, which could emerge as the payment token, while bitcoin evolves more into a digital gold, because its software will only ever release 21 million units.
