Prominent cryptocurrency analyst Benjamin Cowen has observed a whole lot of shift in the digital currency market, with Bitcoin (BTC) reaping the advantages as investors move away from crypto altcoins.
Cowen shared these insights in a video update released yesterday, noting an boost in Bitcoin (BTC) dominance as the cryptocurrency market navigates a period of uncertainty.
Cowen highlighted that even Ethereum (ETH), the second- largest digital currency by market capitalization, is seeing a relative loss in value as investors reallocate funds to Bitcoin. He stated that the illiquid nature of the crypto altcoin market is driving investors towards the relative safety of Bitcoin, causing its dominance to rise.
“The crypto altcoin market is highly illiquid, and people are flocking to the relative safety of the blue chips, which sends the dominance of Bitcoin (BTC) higher,” Cowen stated. He further pointed out that as BTC’s price increases, the crypto altcoin market’s liquidity could no longer sustain it, leading to a potential downturn in crypto altcoin values.
Cowen likewise noted that the present macroeconomic environment makes Bitcoin (BTC) a more appealing choice than crypto altcoins. Amid concerns about an inverted yield curve, high inflation, and a more hawkish Federal Reserve, investors are seeking the relative safety of Bitcoin, which Cowen refers to as the ‘blue chip’ within the cryptocurrency investment class.
“We essentially have this dynamic where this liquidity from the lower liquidity assets are seeking out the relative safety of the higher liquid assets,” Cowen stated. He also mentioned that while those outside the cryptocurrency space can potentially scoff at calling Bitcoin (BTC) a ‘blue chip,’ within the cryptocurrency investment class, Bitcoin (BTC) holds that status.
As the cryptocurrency market persists to navigate uncertain times, Cowen’s analysis implies that BTC’s position as the ‘blue chip’ cryptocurrency could continue to strengthen.
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