1. Impact on Altcoins (other cryptocurrencies)
Price correlation: BTC is considered the leading cryptocurrency and an indicator of the crypto market. When its price rises, many altcoins tend to increase as well, as investors gain confidence in the overall market. Conversely, if BTC falls, altcoins usually follow the same trend.
Market dominance: Bitcoin maintains a high dominance in the crypto market (currently around 40-50%). If the price of BTC fluctuates significantly, it directly affects the flow of capital into altcoins.
Trading with BTC pairs: Many cryptocurrencies have trading pairs with BTC (instead of with fiat). If BTC drops in price, the value of these altcoins in terms of BTC may also decrease.
2. Psychological effect on investors
Bitcoin is seen as a safe haven within the crypto world, similar to 'digital gold'. If BTC suffers a significant drop, many investors lose confidence and a massive sell-off occurs across the market, affecting all coins.
3. Adoption and public perception
Institutional investment: If BTC performs well, it attracts more institutional investors, which legitimizes the market and indirectly benefits altcoins.
Popularization of the crypto market: The price of BTC often sets trends in the media. If it rises, it generates general interest in cryptocurrencies, attracting new users and driving the adoption of other coins.
4. Impact on stablecoins
Demand for stablecoins: When BTC falls, many investors convert their cryptos into stablecoins like USDT or USDC to protect their capital, which increases the demand for these coins.
Liquidity: BTC is one of the main forms of exchange with stablecoins. If BTC rises, the trading volume in pairs with stablecoins also tends to increase.
5. Global economy and countries dependent on crypto
In countries where crypto is key (like El Salvador), a drop in the price of BTC can affect their economy. For example, if the government has reserves in BTC, its net worth may decrease.
Companies with balances in BTC may also experience changes in their valuation and financial decisions based on the price.
In summary, BTC acts as the thermometer of the crypto market, and its price has a domino effect on most coins and on the general perception of the ecosystem. For this reason, many traders and analysts closely monitor its behavior to make informed decisions.