Bitcoin's actual share of the total market capitalization of all crypto-currencies exceeded 90%, Forbes announced on August 22nd.
According to the analysis of Arcane Research, Bitcoin's actual market share is well above the market's 70% share of the market analysis portal.
Liquidity is an important factor
Arcane Research says that liquidity should also be included in the calculation of Bitcoin's valuation. You write:
"You may be able to sell a $ 3 chip, but what if you want to sell $ 1 million?" Without cash, market capitalization becomes a useless measure. "
Using transaction volume as a simple indicator of liquidity and assuming that a more complex valuation model can yield more detailed results, Arcane Research has recalculated the volume-weighted cryptocurrency market capitalization.
Their results indicate a new value of more than 90% for Bitcoin – more than 20% higher than the other estimates.
The researchers performed two independent analyzes – one based on CoinMarketCap data and the other on the 10 cryptocurrency exchanges, which, according to Bitwise Asset Management, report their volume reliably and without falsification. .
Stable coins have been explicitly excluded from the analysis of Arcane Research. The company claims that these asset-backed digital currencies, because of their intrinsic value, are not in direct competition with traditional crypto-currencies.
Bad prospects for Altcoins?
According to the researchers, such market dominance suggests a weak competitiveness, bitcoin being a monetary substitute. For money, network effects are due to the importance of liquidity.
Such domination affects not only investors, but also those who develop the payment infrastructure. Even projects that rely on the underlying security of a public block chain are affected. Despite the fact that the potential of individual cryptocurrency can not be determined solely on the basis of their market capitalization, the researchers explain:
"It is notoriously difficult to compare and contrast projects in different niches, and crypto-currencies could argue that the very idea of measuring the relative strength of different coins and different tokens involves the competition between complementary solutions. "
Bitcoin Blunt fan and former Wall Street distributor, Max Keizer, recently commented on the growing domination of Bitcoin by claiming that "the era of Alts and Hard Forks 2014-2017 is dead."
The current dominance of Bitcoin, measured by the CMC, is at a level that has not been reached since April 2017.