Today's Quick Review: Bitcoin crushes other tokens, but is surpassed by stablecoins. Who will control the ups and downs in the future?
Uncle Kai discusses the future pattern of the digital currency market from two data charts of coinmarketcap today.
Figure 1 shows the market value of each currency in the digital currency market, except for stablecoins. Bitcoin's market capitalization share has gone through three distinct stages:
The first stage: 2009-2016 won the championship.When Bitcoin was born in 2009, there was only one currency in the digital currency market, Bitcoin. After 2013, other currencies appeared one after another, eroding the market share of Bitcoin. Nevertheless, as the originator of digital currency, Bitcoin still occupies more than 80% of the entire digital currency market. In the past 7 years, more than four-fifths of the market value of digital currencies belong to the territory of Bitcoin, and its dominance has not been shaken in the slightest.
The second stage: From January 2017 to January 2018, there are blazing fires everywhere.In just one year, the token market has flourished, and the new currency represented by Ethereum has seriously impacted the dominance of Bitcoin. At the end of 2017, when the currency circle was in its most frenzied period, the price of Bitcoin was still hovering around the historical high of $18,000. Bitcoin's market value share once fell to 33%, that is, it only accounted for one-third of the entire digital currency market value.
The third stage: From January 2018 to the present, regain lost ground.Bitcoin's market share has gradually increased, and it has regained about 70% of today's figure. However, other new currencies are withering day by day, and their market share is shrinking.
Bitcoin’s market share took the lead in suppressing and then rising, and it walked out of a big V shape. The reasons are nothing more than three points:
First: The applications and ecology claimed by other currencies have not developed as expected. Investors are beginning to be disappointed and vote with their feet.
Second, investors as a whole are becoming more mature and risk-averse. The reason for this is that one is the joining of institutional investors, and the other is the bull-bear transition in the market, which gave investors a vivid risk education lesson, making investors more and more rational.
Third, trust trumps efficiency. Although other currencies dwarf Bitcoin in terms of efficiency, Bitcoin has a unique feature of complete decentralization, which eliminates the possibility of price and circulation manipulation, and deeply wins the trust of investors and regulators. Therefore, the regulation defines Bitcoin as a commodity, allowing the public trading and circulation of Bitcoin futures and other derivatives.
Bitcoin crushing tokens means that Bitcoin will re-dominate the world? It's not that simple, because a strong challenger has emerged: stablecoins.
From the figure above, no matter from the market trading volume of the day, 7 days and 30 days, the trading volume of Bitcoin has been completely surpassed by USDT. The fundamental reason is that the digital currency represented by Bitcoin has a price that fluctuates up and down, and the fluctuation is too large, which cannot meet the user's demand for currency in the strict sense. Users hope to have a digital currency that can stabilize prices, serve as a transaction intermediary, and function as a currency for price measurement.
It can be said that Bitcoin embodies the investment attributes of digital currencies, while stablecoins represent the monetary attributes of digital currencies.
Stablecoins represented by USDT have sprung up since 2017, and have become another new force on par with Bitcoin in the digital currency world. However, users still have a lot of concerns about the stablecoins issued by existing currency circle companies, especially their lack of confidence in their stability, the credibility of the underlying assets, the scope of legal use, compliance and security.
Where there is demand, there is a market. Users’ demand for stablecoins has attracted the attention of two other potential big players in stablecoins: the traditional Internet giants represented by Libra are eager to try, and the central bank digital currency represented by the People’s Bank of China is gearing up.
The stable currency market is just beginning, and the demand in the future market will continue to grow, In the future, there will be a tripartite pattern of currency circle stablecoins, Internet enterprise stablecoins, and central bank stablecoins.
It is still too early to say who will win the game, we will wait and see.
The future pattern of digital currency has been determined:Alternative tokens are gone, Bitcoin is making a strong comeback, and stablecoins will be the battleground for future strategists.
