Bitcoin’s market capitalization is nearing 50% of the entire crypto market cap for the first time in seven months. At the time of writing, the percentage stands at around 50.78% as per CoinMarketCap. Before 2017, bitcoin dominated the entire market by accounting for an excess of more than 70%. But as the ICO boom hit, the general public and the investor community developed their inclination towards altcoins thereby increasing their shares in the overall crypto market cap. On January 14, 2018, when the ICO boom was in its full flow, bitcoin even hit as low as 32.88% of the total share. So what is expected to happen next? Is bitcoin going to dominate the market or not? What will happen to the rest of the 2000+ cryptocurrency?
Here’s the graph depicting bitcoin’s performance in the market over the years in terms of dominance.
Bitcoin was the very first cryptocurrency that sprung up on the international scene and it is also the one that has seen the longest runway. All the other cryptos that arose post-bitcoin were either its replicants or provided use-case in different sectors of life. We have the example of ethereum which has remained to be the second biggest crypto for quite a long time. Unlike bitcoin, its sole goal is not to become the global digital currency in the future. Ethereum is a platform to build decentralized applications with ethereum (ETH) as its native token in the system. Since the platform is so important for developers across the globe and dApps running on the platform also use ETHs, the ethereum token has gained a stronghold in the overall crypto market’s share.
Another one to look out for is Ripple (XRP). Ripple is essentially a blockchain-powered platform with XRP as its native token. Ripple allows financial institutions across the globe to transfer money with each other in a transparent manner and at a very high speed. Major brands like Standard Chartered, MUFG bank, MoneyGram etc. are already the customers of the platform.
Seeing the possibilities that a token provides and chances of it going up in the future, public and the investor community also start buying the token taking its total share in the market further up. This is why various tokens other than bitcoin have gained significant shares in the crypto market. There are more than 2000+ cryptos listed on CoinMarketCap as of now. But moving forward, there are very little chances that all of them will survive.
As stated by David Gokhshtein, the member of Forbes Financial Council, while talking to BlockPublisher;
Competition is great and leads to better products, but we don’t need 1500 cryptos doing the same thing.
Most of the cryptos floating around present the narrative of forming a global digital currency network. But this is the exact vision being pursued by the giant bitcoin already. It is highly likely that these redundant cryptos will wipe out with time and only those which present forward strong use-cases or form partnerships with technological giants like IBM, Intel etc. will survive.
David also stated:
I truly believe that cryptocurrency will be accepted on a larger scale in the future, but I also know that 85% of the current digital currencies won’t exist two to three years from now. Now, those who form partnership with existing companies will survive. An example would be Stellar forming a partnership with IBM.
In the future, it is likely that bitcoin will still retain its huge chunk of the market share as it was the very first in the arena and has made a significant following of proponents. Developers from across the globe are also working day and night to make the digital asset better. We have seen the likes of upgrades like the Lightning Network spring up. Along with bitcoin, major cryptos such as XRP, ETH, LTC etc. are also expected to survive with their fair share of the market as they provide viable use-cases.
Bigger sharks eat the smaller ones. Since the market is still developing, smaller cryptos are springing up even now. As it matures, the bigger and more efficient crypto sharks will eat the smaller ones gaining their share of the total market while bitcoin will likely remain to be the king among them.
As stated by the CEO of Twitter, Jack Dorsey;
“The Internet deserves a native currency; it will have a native currency. I don’t know if it’ll be Bitcoin or not, but I hope it will be.”