May 15, 2020 18:30 UTC
May 15, 2020 at 18:30 UTC
Bitcoin Acts As A Gateway To Altcoins, Coinbase Research Suggests
Bitcoin (BTC) acts like a gateway down the altcoin rabbit hole, as indicated by a new research from Coinbase. The research found that while 60% of users purchase Bitcoin as their first digital currency purchase, just 24% of investors keep up the Bitcoin confidence.
Investors show up all the more ready to consider altcoins during bull runs, for example, when Bitcoin’s market strength dipped under 30% on Coinbase during the ICO craze and Ethereum run in 2017. For a short time, Ethereum was the predominant asset traded on the platform with around 50% of the trading volume.
Justin Martin from Coinbase Corporate Development clarified in Around The Block the notion behind this conduct –
“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).”
A Medication That Continues Giving
Others have seen Bitcoin going about as a kind of ‘gateway drug’ to different digital currencies before. Bitcoin analyst Nick Colas said in a meeting with CNBC that the excitement during the 2017 bull run “has now morphed into a general craze… I think of Bitcoin as kind of a gateway drug.”
In June last year on Bloomberg Markets, Messari Inc co-founder and CEO Ryan Selkis recommended Facebook’s Libra could go about as a ‘passage sedate’ for cryptocurrency investors, conceivably driving them to Bitcoin.
Bitcoin’s Fantasy As Digital Gold
Amid the bear markets and times of dread, investors go to Bitcoin as the ‘blue-chip asset of cryptocurrency.’
The report proposes Bitcoin is moving towards its vision of turning into the digital gold, as altcoins are prized for their different services –
“To the extent we believe that alternative assets and networks will provide differentiated services (beyond store of value and digital gold as Bitcoin is targeting), it will be important for the industry to build support for these other assets as well.”