Drop the anchor.
Market dynamics within the cryptocurrency space are quite interesting. However, despite the isolated gains, the pump-and-dumps, and the coming of the ‘altseason,’ when the dust settles, only one coin remains tethered to the larger market, Bitcoin.
Beginning from the second quarter of the calendar year, Bitcoin rose from $4,000 to over $13,000. A recent report by the data-aggregator CoinGecko pointed out that over the same time period, the collective market capitalization recorded an over 125 percent rise.
Trading volume, in addition to market cap, also saw a massive increase, rising to over $175 billion at its peak. The report stated that the market cap surge ‘beat expectations,’ while the trading volume rose by 2x during the close of the quarter in June 2019.
“Beating expectations, Q2 has seen us enter crypto summer with a ~$200B increase in overall market cap. Trading volume also steadily increased throughout the quarter, doubling at the end of the quarter.”
According to the report, the market capitalization peaked prior to the close of June, during the second coming of Bitcoin over $13,000, reaching $350 billion. The trading volume at the time also surged to over $150 billion and continued to hover above $100 billion, till the close of the quarter.
Over the ensuing period, Bitcoin, playing the role of an anchor, added over 10 percent to its vice-grip on the collective market. The report stated that in the second quarter, Bitcoin’s market dominance rose from 54.6 percent to 65 percent.
Bitcoin, with its price rise and market share growth, ate away at the altcoin’s relatively minor hold on the market. The top altcoins that ceded their territory to the king coin were XRP, its dominance falling from 9.8 percent to 5.7 percent and EOS, which saw a fall of 1.3 percent from 3.3 percent, nearly half its value.
The CoinGecko article added,
“Almost all other coins lost market dominance in Q2. By end Q2 2019, the top-5 coins comprised approximately 86% of the overall market capitalization.”
At press time, Bitcoin held 65 percent of the market, Ethereum held 10.5 percent, XRP held 5.65 percent, and Litecoin, Bitcoin Cash, and EOS held 2.56 percent, 2.42 percent, and 2.03 percent, respectively. The coins from the 8th to the 30th spot, based on market capitalization on CoinGecko, held 10.39 percent of the market.