The competitors of bitcoin are getting higher profits, and experts agree that now the important thing is that they move in a synchronized way, just as they have done before.
The alternatives to bitcoin are closing the gap with the market leader after names such as stellar and cardano became fashionable towards the end of 2017.
The share of the largest cryptocurrency in market value has fallen to around 37 percent, from 56 percent a month ago, according to the prices of coins and tokens of CoinMarketCap.
Stellar, designed for cross-border payments, has more than doubled in the first trading days of this year, achieving a record market capitalization of more than 13 billion dollars.
That type of movement raises questions about whether speculators will push up second-tier digital currencies at the expense of bitcoin, even if they have different purposes. The paper value of all the combined cryptocurrencies has more than doubled in the last month to almost 700 billion dollars.
"The alternative cryptocurrencies (altcoins) of today, in large part, are not trying to be competitors of bitcoin," said Lex Sokolin, global director of financial technology strategy at Autonomous Research LLP in London. "They are doing something completely different: ethereum as a platform for smart contracts, iota as a token of the economy of machines, ripple for inter-bank payments, and so on."
The way in which each cryptocurrency is used "should be increasingly relevant, as the novelty of cryptocurrencies ends".
Relative performance is now the billion dollar question at a time when professional investors are looking for ways to value digital assets that seem to defy traditional techniques, such as the potential for profits and dividends in the case of stocks. , or the perspectives of industrial demand in the case of raw materials. Correlation, for example, is one of the many technical analysis tools that are used for projections in different asset classes, and alternative cryptocurrencies have historically moved to bitcoin.
While there were many disparity periods, in general the group increased or decreased jointly, as shown by a Bloomberg survey of more than 5 thousand price data points from CoinMarketCap and CoinCap. Now that the bitcoin rivals get bigger profits, it's more important if the group continues to move mostly synchronized, as they have done to a large extent since the early days when the enthusiasts were mainly computer programmers and libertarians.
While detractors insist that the cryptocurrency market has many signs of a bubble, speculating has been a promising activity for many who bought second-tier currencies.
Ethereum, the second largest by market value, has tripled in the last two months.
Cardano has multiplied by more than 40 in the period. That compares with the price of bitcoin, which has almost doubled, and which became more conventional in December with the debut of the first bitcoin futures contract.
The technical shortcomings of bitcoin, the reference cryptocurrency, could one day be eliminated by a second-generation rival, according to Mike McGlone, a commodity strategist at Bloomberg Industries who compares the market with Internet-based companies a few decades ago.
"When the frenzy is over, the second-generation currencies should continue to gain advantage over bitcoin, which has faults, and where short positions can be held in futures," McGlone wrote in a note last week. "Ethereum seems willing to assume the status of reference cryptocurrency, although the bifurcations of bitcoin ripple and litecoin will be its main competitors."
With a market value of 216 billion dollars as of December 31, bitcoin was often the first (and perhaps the last) stop for investors who possibly mocked smaller and volatile tokens. An increase in investor interest generally benefits smaller ones simply because they have smaller market values, said Spencer Bogart, a partner at Blockchain Capital LLC in San Francisco.
"This, however, goes in both directions: often when the cryptocurrency markets are falling you see a rotation from the numerous group of other cryptocurrencies to the bitcoin, the 'king of cryptocurrencies', which is rightly perceived as having the greatest power of permanence in the ecosystem, "said Bogart.
CRYPTON FEAST PARTY
As the cryptocurrency party got bigger, the spoilers (elegant suit investors and hedge funds) have acquired mainly bitcoins, and have different purchasing criteria than the first converts, which could have gone to less liquid units, as dash or monero, according to industry observers. The diluted base of investors could weaken bitcoin, the largest by market value.
"The capital base of these markets is evolving rapidly," said Kyle Samani, managing partner of Multicoin Capital, a digital asset hedge fund in Texas. "Before the recent bitcoin bullish run, the cryptocurrency investor base was mainly made up of engineers, nerds and libertarians."
In the United States, Samani of Multicoin Capital says he sees a separation between what is offered in the popular Coinbase cryptocurrency exchange and everything else. "Most retail investors are only buying available assets in Coinbase," he said. "We will probably continue to see a disconnect between what is in Coinbase and other alternative cryptocurrencies."