Since the launch of Bitcoin in 2009, it has become clear that this digital currency was not just a technical experiment, but the cornerstone of an entirely new financial world. Over the years, with the emergence of thousands of other digital currencies, the most important question remains among traders and investors: Is Bitcoin really the one that controls the cryptocurrency market?
Bitcoin as a mirror of the market
Bitcoin is known as the 'mother currency' or 'digital gold', not only because it is the first, but because it is the most established in terms of market value, liquidity, and security network. When Bitcoin rises, the appetite of the entire market often opens up, causing most altcoins to rise with it. Conversely, when it drops, the market enters a state of panic that leads to a widespread decline.
Technically, the correlation analysis between Bitcoin and altcoins shows that most digital assets move in the same general direction as Bitcoin, especially during periods of strong volatility.
Impact of liquidity and institutions
In recent years, huge institutions have entered the crypto market, such as hedge funds and tech companies, most of which started investing in Bitcoin as an initial entry before considering other assets. This institutional liquidity is pumped into the market through the Bitcoin gateway, increasing its influence as a general market indicator.
But not always…
Despite Bitcoin's dominance in the market, there are unique moments known as 'Altcoin Season', where some altcoins rise independently of Bitcoin. These periods emerge when there are strong technological developments or strategic partnerships for specific projects, or simply when investors seek higher profits than those offered by Bitcoin.
As some stablecoins like USDT and USDC have started to play an important role in daily trading and liquidity, they do not replace Bitcoin in influencing the general market sentiment.
Summary
Bitcoin is still the undisputed leader in the cryptocurrency market, influencing investor sentiment and serving as a key benchmark for measuring the overall market performance. However, with the development of alternative projects and market maturation, we may witness a future where the influence is more balanced among several currencies, especially those that offer practical solutions and build strong user bases.
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