The dominance index of bitcoin, which measures the dominance of bitcoin over the global cryptocurrency market, has fallen to an all-time low at 37.7 percent, as altcoins surged in value.
Throughout 2017, the dominance index of bitcoin has dropped from 90 percent to 37.7 percent, primarily due to the rising popularity and adoption of alternative cryptocurrencies. Some currencies like Ethereum, Ripple, and Litecoin have risen by at least 50-fold over the past year, with Ripple demonstrating a staggering 330-fold increase in value.
Experts such as ShapeShift CEO Erik Voorhees noted that the high transaction fees have largely fueled the growth of alternative cryptocurrencies, as it has become difficult to process small payments using bitcoin.
“Fellow Bitcoiners, are you ever going to realize how problematic these fees are getting? Average fees now over $40 per transaction. A year ago avg fee was $4. A year prior, $0.40. Growing faster than price, and exponentially with usage. We just spent $4800 to move 15 BTC in one transaction,” said Voorhees.
In a response to a statement from a member of the bitcoin community, Voorhees emphasized that alternative cryptocurrencies have become viable options to process cheaper payments. “Like Litecoin, Dash, ETH or BCH… chains that still work as peer to peer electronic cash systems,” he added.
High profile investors including billionaire hedge fund legend Mike Novogratz suggested that the price of bitcoin could easily surpass $50,000 in 2018, as its market valuation achieves $1 trillion.
“Bitcoin could be at $40,000 at the end of 2018. It easily could. There’s a big wave of money coming, not just here but all around the world,” Novogratz said.
Analysts still remain highly optimistic in regards to the performance of bitcoin 2018, given that some of the world’s largest financial institutions have started to integrate support for bitcoin. Most notably, the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (Cboe) have filed for six bitcoin exchange-traded funds (ETFs), which are expected to provide individual investors in the traditional stock market a better platform to invest in bitcoin.
In consideration of the many billions of dollars that are expected to flow into the bitcoin market over the next few months, analysts remain enthusiastic. But, some experts have also begun to ponder the long-term growth of alternative cryptocurrencies, especially utility tokens and anonymous cryptocurrencies that hold massive potential.
For the first time in history, the combined market cap of the top 5 cryptocurrencies in the market have come close to surpassing that of bitcoin. The combined market valuation of Ripple, Ethereum, Bitcoin Cash, and Cardano amounts to $218 billion, and is less than $10 billion from surpassing that of bitcoin.
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