Why are Altcoins dependent on Bitcoin?

The fundamental reason behind altcoins following Bitcoin is because altcoin prices are typically measured in Bitcoin. Therefore, if someone holding altcoins wants out of the crypto industry altogether, it’s most likely they would first sell their assets for Bitcoin, and then convert Bitcoin back to a fiat currency.

Do altcoins follow Bitcoin movement?

Because they are often derived from Bitcoin, altcoin price movements tend to mimic Bitcoin’s trajectory. However, analysts say the maturity of cryptocurrency investing ecosystems and the development of new markets for these coins will make price movements for altcoins independent of Bitcoin’s trading signals.

Are all Altcoins based on ethereum?

Some of the most well-known Altcoins (based on market cap) are Ethereum, Ripple, Tether, Bitcoin Cash, Bitcoin SV, and Litecoin.

Why do altcoins follow bitcoin?

The fundamental reason behind altcoins following Bitcoin is because altcoin prices are typically measured in Bitcoin. The original crypto asset may be flanked by over 3,000 competitors, but it still commands over half of the entire cryptocurrency market cap.

Why do altcoins go up and down with low volume?

If Bitcoin goes up with low volume, enough followers of your coin can put a little market buy action in it and it will go up, but not as much as you wish. If Bitcoin goes down with low volume, now your altcoin has a chance to go up in value with very little market buy activity. On a similar note, partly related, is the overall Bitcoin dominance.

Why do altcoins surge in value?

However, sometimes Bitcoin drops in value while altcoins experience a surge in value. A fundamental reason for this is that investors with a watchful eye will pull money out of their Bitcoin investments, and instead pivot to altcoins that are showing promise.

Why does bitcoin dominate the crypto market?

This domination of the crypto market affords Bitcoin a lot of influence and control. In addition, most altcoins can’t be purchased directly using fiat currencies; instead, the majority of buyers purchase some Bitcoin first, and then trade it for their altcoin of choice.