Right now, Bitcoin's market domination is down to about 66% of a total market cap of $240B from around 70% previously.
Is this an indication that Bitcoin is losing its place? Not at all.
Bitcoin is the original cryptocurrency, creating the first new asset class in over 400 years. The last new asset class to be created was Bonds. The first ever government bond was issued by the Bank of England in 1693 to raise money to fund a war against France. These first bonds were a mix of both lottery and annuity.
Being the first ever invented, Bitcoin was released in 2009, with a then value of .... $0. Back in 2009-2010, you could buy Bitcoin 4 for a penny! In fact, there's a story of a guy who paid 10,000 BTC for two pizzas. In today's prices, that's about $90,000,000 ... per pizza!
So, fast forward 8 years and Bitcoin, the grand daddy of crypto, reached it's all time high of nearly $20,000 USD. In the last 2 years it has proceeded to lose over 50% of its value. But, you need to put it in perspective. If you had put even $50 into Bitcoin in 2009, today, even at the lower price, they would be worth $180,000,000 USD!
The cryptocurrency market is a nascent market - that is, it's early days yet. I heard yesterday that less than 2% of internet users own any crypto. So, that makes us Innovators (those who invested in the very early days).
Many new innovations will fail. But cryptocurrency, now in it's 11th year, is here to stay.
Look at the current Stock Market. It's been in operation for over 100 years. It has grown year after year until now it's heavily oversold. If you look at what's happening around the world, countries are in severe financial trouble - I can't think of 1 country that doesn't have a massive debt. None of these debts can ever be repaid so the government's start borrowing more and more money - as they call in in America, Quantitative Easing (QE). The end result of these policies of reckless borrowing and wanton spending will result in hyper-inflation. Just look at Venezuela - from one of the wealthiest countries in the world to one of the poorest with incredible hyperinflation.
One of the effects of this QE is that companies are artificially inflating their share price by share buy back schemes. People get excited seeing prices going almost vertical and that's when the "dumb" money buys. The smart money is selling. This huge growth is unsustainable.
Share markets are coming to a big crash. I don't know when, but it can't be far away. What happens when the smart money gets scared - they move into commodities - gold, silver, precious metals, oil and now, digital gold - Bitcoin. We saw a preview if this recently when America killed the Iranian General and people feared a war would break out - the price of Bitcoin soared quite sharply and steeply. To me this is evidence that the smart money now views Bitcoin as a store of value.
We are already seeing institutional money starting to enter the crypto market. Fund managers, financial enterprises and the "whales" - wealthy individuals. This is going to drive significant market cap growth. This growth is not a dollar for dollar value increase - it is an exponential growth. As new money comes in, it drives the price up and therefore all Crypto holders benefit - and not just Bitcoin. As the price of BTC rises it drags the alt coins with it. I have heard numbers varying from 50 - 100 x increase in value. So $1 billion of new money entering the market can increase total Market Cap by $50 - $100 B !
Will Bitcoin remain the Premier store of value? Maybe, maybe not. But whatever the future brings - new technology, incredible innovations, new ideas - Bitcoin will remain a Store of Value for many years to come.
