Prominent cryptocurrency analyst Benjamin Cowen has observed a wholeย lotย of shift in the digitalย currency market, with Bitcoinย (BTC) reaping the advantages as investors move away from cryptoย altcoins.
Cowen shared these insights in a video update released yesterday, noting an boostย in Bitcoinย (BTC) dominance as the cryptocurrencyย market navigates a period of uncertainty.
Cowen highlighted that even Ethereumย (ETH), the second- largest digitalย currency by marketย capitalization, is seeing a relative loss in value as investors reallocate funds to Bitcoin. He stated that the illiquid nature of the cryptoย altcoin market is driving investors towards the relative safety of Bitcoin, causing its dominance to rise.
โThe cryptoย altcoin market is highly illiquid, and people are flocking to the relative safety of the blue chips, which sends the dominance of Bitcoinย (BTC) higher,โ Cowen stated. He further pointedย outย that as BTCโs price increases, the cryptoย altcoin marketโs liquidity could no longer sustain it, leading to a potential downturn in cryptoย altcoin values.
Cowen likewise notedย that theย present macroeconomic environment makes Bitcoinย (BTC) a more appealing choice than cryptoย 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 โblue chipโ within the cryptocurrency investment class.
โWe essentially have this dynamic where this liquidity from the lower liquidity assets are seeking out the relative safety of the higher liquid assets,โ Cowen stated. He alsoย mentionedย that while those outside the cryptocurrency space canย potentially scoff at calling Bitcoinย (BTC) a โblue chip,โ within the cryptocurrency investment class, Bitcoinย (BTC) holds that status.
As the cryptocurrencyย market persistsย to navigate uncertain times, Cowenโs analysis impliesย that BTCโs position as the โblue chipโ cryptocurrency could continue to strengthen.
Featured Image Credit:ย Photo / illustrationย byย โMichaelWuenschโย viaย Pixabay
