Cryptocurrency markets have evolved into a rapidly growing ecosystem in recent years. Hundreds of different cryptocurrency and blockchain projects offer a variety of opportunities for investors and speculators. However, this diversity and rapid growth has created an ever-changing landscape in the crypto-asset space.
Benjamin Cowen, as a popular strategist and cryptocurrency analyst, follows these volatile market conditions. Cowen has observed that recent allocation changes have been in Bitcoin’s favour, thus increasing BTC dominance. That is, investors are redirecting their funds from altcoins to Bitcoin, indicating that Bitcoin is gaining more weight in the cryptocurrency market.
According to Cowen, even Ethereum (ETH) is losing value relative to Bitcoin as people turn to leading crypto.
“The altcoin market is quite illiquid and people are flocking to the relative safety of blue chips that are pushing Bitcoin’s dominance higher… The altcoin market is bleeding against ETH and Bitcoin. Theoretically, ETH is also losing blood against Bitcoin. Rising dominance sends Bitcoin/dollar higher to the detriment of altcoin market liquidity. At some point, the altcoin market liquidity can no longer sustain the price of Bitcoin… As Bitcoin adjusts, the altcoin market becomes even more devastated.”
The term blue chip is a financial term often used in the stock market. Blue chip stands for blue chip and refers to assets with high value, reliability and stability. In the crypto industry, there are those who argue that the blue chip is BTC.
The popular crypto analyst also thinks that Bitcoin is a more attractive investment option than altcoins in the current market conditions:
“We actually have a dynamic where this liquidity from low-liquidity assets tends towards the relative safe state of high-liquid assets, right? (…)
In times like these when there’s a lot of macro stuff to talk about: inverted yield curve, high inflation, a more hawkish Federal Reserve than we’ve seen in 40 years, people look for the relatively safe blue chips in the relevant asset class. People who are not in crypto mock the idea of calling Bitcoin a blue chip, but what you are looking for is to find out what the blue chip of the asset class you are interested in, right? And in crypto, it’s Bitcoin.”
You can check the price movements here.