First things first, I'm not a Bitcoin Maxi. I started investing in crypto in 2020 during COVID and my portfolio holds a big chunk of altcoins. I always tried to get involved into buying some BTC - but the potential return on Altcoins was just too tempting to turn down. Now, I've been accumulating BTC and haven't bought any Altcoins ( in serious amounts) since June of this year - here's five reasons why ( in no particular order)
1. "If History is any indication" - Prior Bear Markets
Historically, there has always been a period of accumulation for BTC that has proven to be the best time to accumulate BTC exclusively. Why? Let's have a look at some charts. Specifically, the bitcoin Dominance Chart - as this allows us to see what percentage of the crypto market cap belongs to BTC.
The red circles show the previous transition from the bull market to the bear market in relation to the bear market we are currently experiencing now. Only this bear market feels worse. In fact - this is currently Bitcoins second Longest bear market ( Mainly due to macro economic conditions - keep in mind this is the FIRST time BTC is going through Quantitative Tightening (QT) by the FED.
However, if we don't take timing into consideration and just focus on the levels where historically BTC was at a price worth paying for - we can see that we find ourselves accumulating in that level. Does this mean we are guaranteed to move upwards from here? No - in fact this does not exclude a flash crash that typically happens at the end of the bear market. However, realistically waiting for that dump is probably not the best way forward as you will most likely than not - miss buying that opportunity. Missing out on this dump would lead you to FOMO back into the market at a premium. Instead, you're better off dollar cost averaging in the accumulation zone rather than trying to be the one that will time the perfect bottom, don't you think?
Ok, this makes sense - but why should I stick exclusively to Bitcoin?
2. The Altcoin Reckoning
When the Bitcoin Dominance starts a rally - it does not necessarily mean that Bitcoin is going to start pumping. Instead - BTC could actually move sideways for months BUT altcoins will start bleeding against BTC valuation which will cause the BTC dominance to start pumping. Remember - the BTC.D is taking into account the percentage of BTC market cap as a ratio to the total crypto market cap. History shows us that in this accumulation period altcoins tend to get REKT against BTC. This is usually the period where altcoins start to face liquidity crunches and projects that are surviving on shaky grounds tend to lose their balance. In times like these, people look for stability - and what is more stable than the leader of the market taking back it's dominance?
A Counter-argument here would be that there has been SO MANY new altcoin projects that are taking a chunk of BTC's dominance because they deserve it - they are genuine projects that need to stick around because of their potential. This is true, BUT these type of projects can be counted on your fingers because they are so rare to find. There will always be outperformers in the bear market - but there will also be AMPLE time to accumulate into these projects BEFORE the bear market begins. Also, there other factors that need to be considered, which brings me to my next two points :
3. Upcoming Regulation
After the LUNA and FTX fiasco it has become clear that Regulation is desperately needed in crypto. This is what is holding back institutions from getting into crypto. The potential returns mean nothing to them if they have no guarantee that their initial investments are secure. No company would put themselves at risk for the sake of an investment. The SEC and CFTC have already both agreed that BTC will most probably be classified as a Commodity - which is excellent, bullish news for BTC! However, altcoins are much more complicated than that.
See, the key importance as to whether an asset is defined as a commodity or security depends on whether there was/is an issuer of the token. BTC has no issuer, the tokens are mined and fixed. Ethereum however, has an issuer, had an airdrop and it's multiple layers of DeFi make it very hard to classify - the tendency is that ETH ( and that means anything built on ETH) will most likely be classified as a security - meaning it will fall under the jurisdiction of the SEC. Although this might not necessarily be a bad thing for ETH in the long-run - in the short-term it will definitely cause some fear and panic.
4. Timing of events
When we add the previous two points together we can see a correlation between the way the market tends to go - and the way things are moving in practice. Both points lead to Bitcoin for safety. It is quite a coincidence that BTC dominance Rally and Crypto Regulation seem to be coming at the same time, or is it?
Well, let's have a look at the ETH chart. More specifically - the Ethereum Regression Band. Notice anything in particular?
Yep - We're still due a test of the lower regression band! Historically, Ethereum has ALWAYS tested the bottom of the regression band before starting a healthy bullrun and that accumulation area takes a couple of months to recover. Surely, with this chart showing the expectation of this to happen, together with the points mentioned above - make it very likely that this scenario is going to play out this way, ESPECIALLY if regulation is really around the corner. People are scared and doubting the crypto market right now, the FTX saga has killed a lot of trust ( Mostly from institutions) in the crypto space. Which brings me to my final point.
5. The power of decentralization.
We get so lost in valuations and potentials of this asset class that we sometimes forget what makes this asset more valuable than other asset classes. Decentralization is one of them. If the events of LUNA and FTX have not proved this point - I don´t know what will. Bitcoin is the ONLY truly decentralized asset. This article is already too long enough for me to explain why and how, but alone the fact that no one is control of what happens to BTC and its issuance should be enough reason for you to prefer BTC over any other altcoins when talking about security and decentralization. It´s all about control. Anything that has human beings at the centre of the control are at risk of being jeaprodized because humans can´t be trusted, this is WHY Bitcoin was invented in the first place!
In Conclusion - We are heading for better days for the crypto industry, but we might have to go through periods of max pain before we get there, especially in the Altcoin market. We need to evolve and mature with it as investors. If you´re someone like me who got into Crypto in the last bull run, then it may be the perfect time for you to start understanding what makes this asset class valuable in the first place. Understand how the markets work, how nothing is guaranteed, and how fundamentals don´t change regardless of the price action, if they do (like FTX who started using customers money) then that projects is not really worth longing in to. There is no right or wrong, this divide in the crypto community between Bitcoiners and Altcoiners needs to come to an end. We´re at a crucial point for this industry and we need to come together and help each other out, if we want to see Crypto succeed.
I hope that you read this article as an objective one, rather than a subjective one and labelling it under "Bitcoin Maxi Propoganda". There is a time and place for everything, and right now - It´s time for BTC.
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