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Q/ Why are cryptocurrency prices linked to Bitcoin?
A/ 1. Leadership and establishment:
Bitcoin is the first cryptocurrency created in 2009, and it laid the foundation for blockchain technology. Therefore, it is considered the first reference in the cryptocurrency market.
2. Trust and market value:
Bitcoin has the largest market value among all cryptocurrencies, making it the most influential currency in the market. When the price of Bitcoin rises or falls, the entire market is affected accordingly.
3. Trading as a reference currency:
Many cryptocurrencies are traded against Bitcoin instead of fiat currencies (such as the dollar or the euro), making it the primary reference currency in the market.
4. Liquidity and adoption:
Bitcoin has the largest number of traders and investors in the market, and it is widely accepted on many platforms and companies, which enhances the association of other currencies with it.
5. Psychological correlation:
Bitcoin is considered the "indicator" or "leader" of the market. When there are big changes in the price of Bitcoin, investors follow suit in making their decisions about other currencies.
