Does the large amount of Altcoins affect the price of Bitcoin?

Although Bitcoin (BTC) remains the leading cryptocurrency in the market, the growth of the Altcoins is something that cannot be ignored. In recent years, many alternative digital currencies to BTC have emerged. But does the rise in Altcoins affect the price of Bitcoin? This is what you will try to answer in this article.

Before starting, it is important to clarify the definition of this type of asset. The term Altcoin is the abbreviation for "alternative currency," and refers to all those cryptocurrencies other than Bitcoin, such as Dash, Ripple, Dogecoin, etc.

At first, it seems that the amount of Altcoins in the market has nothing to do with the price of Bitcoin. However, by taking a more detailed look, some relationships can be found.

The first occurs when applying the laws of supply and demand to the crypto market. The more possibilities of digital currencies exist, the price of BTC will tend to fall.

This is because, if we stick to this theory, that now, thanks to the Altcoins, there are more options to choose from. Therefore, the "exclusivity" provided by the old shortage of other crypto-assets is being lost; and with it, high prices.

However, many consider this response unsatisfactory. That is why we will move on to the second theory: dominance.

Altcoins and Bitcoin dominance

The dominance of Bitcoin refers to how much users prefer it over other criptocurrencies In other words, how much dominance it has over the market.

Although dominance is not directly related to the price of BTC, it is related to Altcoins.

The interesting thing about Bitcoin dominance is that it decreases when an altSeason is starting. This period can be defined as the season when the Altcoins reach their most positive points.

For example, one of the latest and most profitable AltSeasons occurred at the end of 2017, as can be seen in the graph below.

Bitcoin dominance drop that coincides with Altcoins boom.

Then, it could be considered that the arrival of a new AltSeason, taking into account the sharp falls that Bitcoin has suffered, could lead the Altcoins to a golden age that ends up obscuring BTC.

Some believe that an upcoming fall in the dominance of Bitcoin will also come with a fall in its price. And, not satisfied with that, they assure that this decrease in dominance will be due to the increase in Altcoins in the market.

However, nothing is proven. There are still people who simply believe that the price of BTC and the amount of "alternative cryptocurrencies" are not directly related.

It would be interesting to note how this unfolds in the coming months as the crypto market rebounds.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.