Continued from the previous article
The logic of Ethereum's rise leading to the explosion of altcoins
1. The foundation of the Ethereum ecosystem:
- Ethereum is not only a cryptocurrency, but also a decentralized application platform (DApp) and smart contract platform. Many new blockchain projects and tokens are built on the Ethereum blockchain, using its smart contract function to implement decentralized applications.
2. Price increases drive confidence and capital inflows:
- When the price of Ethereum rises, it usually attracts more investors and funds into the entire cryptocurrency market. Investors' increased confidence in Ethereum will drive capital inflows into other projects and tokens in the Ethereum ecosystem.
3. Ecosystem prosperity:
- The rise in Ethereum prices is often accompanied by increased use of the Ethereum network, such as more transactions, more decentralized applications (DApps) and increased activity. The increase in these activities will further enhance the market's confidence in the Ethereum ecosystem and attract more developers and projects to join.
4. Benefits of altcoins:
- Since many altcoins are built on Ethereum, when the price of Ethereum rises and its network activity increases, these Ethereum-based altcoins will also be positively affected. Investors will see the potential of these altcoins, and funds will begin to flow from Ethereum to these altcoins, driving up their prices.
5. Capital spillover effect:
- In a bull market, as the market is full of funds, investors will look for new investment opportunities after making profits. These funds will flow from Bitcoin to Ethereum, and then further to other Ethereum-based altcoins, leading to the prosperity of the entire market.
6. Verification of historical laws:
- This trend has been verified many times in the past few rounds of bull markets. Bitcoin is usually the leader of the market. When the price of Bitcoin rises, it first drives Ethereum, and then the rise of Ethereum will drive other projects and tokens within its ecosystem, and finally drive the rise of the entire cryptocurrency market.
