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Altcoins May Die When BTC Rallies
While there have been a number of calls for an altseason and the death of Bitcoin, BTC has begun to outperform its crypto peers yet again, posting gains when altcoins suffer. As of the time of writing this, Bitcoin dominance sits at a hefty 55.8%, up from lows of around ~35% at the peak of 2018’s bubble.
One venture capital group, Heisenberg Capital, led by anti-establishment proponents and (very) early cryptocurrency adopters Max Keiser and Stacy Herbert, says that Bitcoin’s hegemony may continue to grow.
In a recent tweet, the venture capitalists, who have purportedly allocated capital to Kraken, ShapeShift, Abra, Bitfinex, among other prominent industry upstarts, remarked that the market has begun to reject everything, save for BTC. This has seemingly been the case. As explained earlier, the so-called “crypto winter” of 2018 has allowed Bitcoin to claw back market share from altcoins, most of which were dramatically overvalued and overhyped during early-2018.
Heisenberg corroborates this, even hinting that it thinks altcoins still have few viable use cases or a lack of a solid value proposition when it wrote: “As BTC climbs toward our 2011 target of $100,000, we believe everything except BTC will die-off.”
History would agree with this analysis.
A majority of 2013’s top 20 crypto assets have all but faded out of existence, with newer projects like Ethereum, Monero, and EOS ousting Namecoin, Peercoin, and Feathercoin, which all used to be the crème de la crop back in their hay day. Not only have these little-known projects faded from public memory, but some have totally abandoned, with their token values dropping off the face of the Earth. While many new blockchain projects have more staying power than their predecessors, many commentators, like Blockstream’s Samson Mow, are sure that history will rhyme… eventually.
What Will Drive Bitcoin Past $100,000
This begs the question — what will drive Bitcoin past $100,000? Well, according to Keiser, it will have much to do with Bitcoin’s underlying characteristics. In an interview conducted with Bitcoinist’s Allen Scott late last year, the investor noted that the Bitcoin protocol itself is “genius,” alluding to the controversial opinion that the nature of the world’s first blockchain supersedes price. Saifedean Ammous, for instance, has incessantly called BTC, the world’s “hardest money,” alluding to its nature as a decentralized, borderless, censorship-resistant, and scarce asset that easily ousts government-issued cash in a variety of facets.
Interestingly, the interviewer went on to draw attention to the fact that a majority of industry participants see BTC as a “risk-on asset,” debasing the sentiment that BTC is essentially the world’s second coming of gold but in a digital form. Yet, Keiser added that this is, in fact, false.
Keiser explained that BTC, like gold and traditional fiat, is a “risk-off” asset. And as such, he exclaimed that once the market at large acknowledges this fact, which has flown under the radar, the world’s first cryptocurrency could surpass its all-time high as capital flight occurs to BTC. He further explains:
“Bitcoin is the monetary black hole that will gobble up all fiat and rise to more than $100,000 doing it. But humans themselves may never see that day.”
Title Image Courtesy of Thought Catalog Via Unsplash
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