The Relationship Between Bitcoin and Altcoins in Bull Markets: Pantera Capital
A recent market report by Pantera Capital highlights the dynamics between Bitcoin (BTC) and other cryptocurrencies during bull cycles. The report provides insights into the 2024 season for Bitcoin, altcoins, and decentralized finance (DeFi).
Bitcoin Dominates Early Bull Runs
In the initial stages of a bull market, Bitcoin tends to outperform other tokens. This is because Bitcoin has the largest market capitalization and is favored by institutional investors. Its performance sets the tone for the broader market.
Bitcoin’s Appeal to New Investors
New entrants to the crypto space often start with Bitcoin due to its reputation and liquidity. With a market share of nearly 50%, it acts as a gateway into the world of cryptocurrencies. Investors then explore altcoins and innovative use-cases like dApps and NFTs.
The Relationship Between Bitcoin and Altcoin Performance
During bull cycles, altcoins initially experience a decline in market share while the overall market cap grows. However, as the bull run progresses, altcoins start to outperform Bitcoin. Token selection becomes crucial for long-term outperformance.
Hot Take: The Role of Bitcoin and Altcoins in Bull Markets
The volatility of digital assets, particularly Bitcoin, can be observed during different phases of a bull market. While Bitcoin dominates early stages, altcoins gain momentum as new investors enter the market. Token selection becomes key for long-term success.
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