I’m sorry Bitcoin, it's time we saw other people…
Since its inception thirteen years ago (9 Jan 2009¹) Bitcoin has been the dominant force in Cryptocurrency –but for the sector to grow, maybe Bitcoin needs to take the back seat.
Perhaps that's a bit melodramatic, but if you ask someone on the street to name a cryptocurrency — unless they are an enthusiast– the answer is going to be Bitcoin. This was advantageous when blockchain was in its earliest stages as it brought awareness into the mainstream. Bitcoin had a catchy name which gave instant recognition and generated a plethora of click-worthy news pieces — all further enhanced by the mystery around its creator.
But 10,000 (and counting) cryptocurrencies² later, I think it's time we cut the cord and moved on. The entire crypto market is tied to Bitcoin; when it moves… the market moves, and when it falls… the market crashes down.
I can see some rationale in the argument that Ethereum is a better bellwether as it hosts some huge projects, and the majority of the larger blockchains (Binance, Solana, Polygon et al.) maintain compatibility but despite this Bitcoin continues its stranglehold over the entire crypto space. Ethereum probably isn’t going to be the driver of mainstream adoption, and the less said about Vitalik Buterin (Its oddball creator) the better.
Personal note: I think the rather clunky name Ethereum has held it back; it sounds far more rooted in science than the more consumer-friendly Bitcoin moniker… anyway…
Mindshare vs Marketshare
I get it, Bitcoin is the biggest cryptocurrency (by far) by market cap, it's the first to market and most well known — so it deserves to be important.
Important yes, but compare the 90-day chart for Bitcoin (#1) with Ethereum (#2), BNB (#5), Ripple (#6), Cardano, Solana and even Elon’s pet Dogecoin (#8, #9, #10).
The charts are all basically the same. The only two charts that show different trends are the two dollar-pegged stable coins, and they trade in a very narrow range (Best we don’t mention Luna either!).
How Does This Compare To Stonks?
Now for those of us who trade stocks and shares, sentiment is never far; the markets follow sentiment too — but not this close, and certainly not one single beast (I don't mean Elon!).
In crypto, the fundamentals, the underpinning intentions, the founding teams or even profitability are ignored and the company's value is still beholden to Bitcoin’s value.
Now to directly compare crypto with the stock market is tricky as the datasets and interfaces are much more nuanced, but I took a grab of the 90-day performance of the FTSE 100⁴ (The UK’s Top Tier Stock Market), and organised the companies by sector, and then by gain, to visualise the spread and my argument.
Yes, there is a strong correlation (although harder to unpick the fact that pretty much everything in 2022 is down!), but within the same market, there is still a large spread between gainers and losers. That is generally healthy — no two companies perform the same, and overall companies are compared to their peers by their fundamentals (P/E Ratio, Profitability) and merits (Opportunities, Leadership Team, Market Perception).
What Is My Hope
A future where the market is driven by utility and fundamentals and that pumps and dumps just don’t get the impact or attention they currently do.
Optimistically the market needs regulation and education; we need more informed investors — but that's a tough ask when seemingly absurd/random projects “moon” in the way they keep doing.
In an effort to encourage better businesses and better investments, we want to provide you with an honest an answer to the common mainstream question of “What can you even do with all the cryptocurrencies?”.
At Aureus Platforms (us!) we have been developing an entire ecosystem for the travel sector, and are in final stages of preparing our first set of tangible utility.
Stay tuned, and subscribe.
: Bitcoin, Wikipedia
: Number of cryptocurrencies worldwide from 2013 to February 2022, Statista
: Market capitalisation of the major cryptocurrencies, CoinMarketCap.com, May 12 2022
: 90 Day Performance of the FTSE 100, Fidelity, 12 May 2022
: Featured Image, RODNAE Productions, Pexels