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August 21, 2021 0 Comments
The first thing that you need to know is that Crypto is volatile. The Value of the market has gone up and down over the years. This is not particularly a bad thing as other investments go up and down too. You need to be a smart investor with Crypto.
Why does Crypto enjoy Value Jumps?
So many people are reliant on the Internet these days. People get very frustrated if they are out and about and cannot find a WiFi connection to use the Internet with their mobile devices. Whether this is a good or bad thing is of no consequence when it comes to Crypto investing. The important thing is that the growing use of the Internet is good for Crypto.
Over the years since the launch of Bitcoin (First Crypto Invented), it has attracted investors from all corners of the world. Being a true global digital currency available to all (in theory), it is no surprise that it has generated a lot of excitement.
Let's Discuss Bitcoin
Most people know that there is only so much gold that we can mine. Each year there is less and less gold left on the Earth. Therefore it has great Value. You can apply the same logic to Bitcoin. There will only ever be 21 million Bitcoin. As time passes, this number will dwindle, and the Value increases. It is now tough to mine Bitcoin, and this is only going to get tougher. Investors like the fact that Bitcoin represents a predictable and sound monetary policy that all can verify. At any time, you can see how many Bitcoins are in circulation and how many new ones have been created.
You can easily trade Bitcoin for some products and services. If you have a gold investment, then this is not a liquid asset. You would have to sell some of your gold stock for cash before you could purchase anything. It is straightforward to make cross-border transactions using Bitcoin. There are no governments or banks involved. You can send Bitcoin securely in minutes to anywhere in the world. Transaction fees are very low compared to fiat currency transactions.
We have the Internet to thank for the rise in popularity and Value of Bitcoin. The Internet has made the sharing of information easy wherever you are, and this concept will underpin the success of Bitcoin as a global and verifiable currency.
Most New Crypto investors do not know that Bitcoin is the "Mother" Ship of Crypto as of this writing. What does this mean? In Crypto, we have what is called Bitcoin Dominance. Bitcoin Dominance is a measure of how much of the total market cap of Crypto is comprised of Bitcoin. It can help you understand the trend of Bitcoin and Alt Coins (All other coins). The most important thing about Bitcoin Dominance is that it can help understand if Alt-coins are in a downward trend or uptrend against Bitcoin.
The Alt Coins (all other coins) are essentially attached to Bitcoin. In most cases, when Bitcoin increases in Value, so do the Alt-coins. When the Dominance chart for bitcoin decreases, the Alt-Coins can begin to detach from Bitcoin flow at a percent of the dominance. Likewise, when Bitcoin Dominance increases, the Dominance of the Alt-Coins Attachment Increases.
Example: If the Bitcoin Dominance were at 83%, each Alt-Coin would likely follow the movement of Bitcoin. Exceptions to this are when a particular Alt-Coin has a significant increase in market cap to drive the price upwards. This can also happen in reverse for the Alt-Coins. If the total market cap of an Alt-Coin is significantly decreased, you will see the Alt-coin fall in price. When the Bitcoin Dominance drops to below 50%, you could also begin to see Alt-Coins go off on their own and rise without the pull of Bitcoin. Which is called a Bullrun.
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