Why Does All Crypto Follow The Same Pattern?

We have often come across people who are enthusiastic about the common discussions and debates that are currently being addressed around cryptocurrency. Out of the many interesting topics that these people engage in, an of-recent question that is surfacing in the world of cryptocurrency has been why it is that all cryptocurrency networks follow the same pattern.

If you have stumbled upon similar thoughts yourself and are interested to know more about this, you are in the right place. Out of all the cryptocurrency networks that are available currently, Bitcoin, nevertheless, is still continuing as the top-ranked cryptocurrency. The second position that is secured by Ethereum typically stands at a value that is almost half the market capitalization of Bitcoin.

The trend and pattern set by Bitcoin will definitely trickle down to all the other cryptocurrencies. All Bitcoin followers should click here to avail their services of real-time Bitcoin trading signals.

Reasons For Similar Pattern Among All Cryptocurrencies

Even though many say that it is hard to come down to exactly one reason that can thoroughly explain why this has been happening in recent times, it is our job to keep you informed about the many different tropes of the said discussion that are scattered all over the Internet. So, let us quickly go through some of the most common and important ones.

1. Bitcoin On The Driver’s Seat

Since its launch way back in the year 2009, Santoshi Nakamoto (pseudonym) is the individual behind the top-ranked blockchain company that exists today. As also mentioned, it is way ahead of the game with a market capitalization value that is approximately double that of the company that follows Bitcoin.

Many enthusiasts feel that since Bitcoin dominates nearly 40% of the industry with respect to the value of market capitalization, the control percolates even within the realm of patterns and trends.

In addition to this, there have been many deliberations on how Bitcoin rules this industry by positing itself as the primary currency while someone is trying to trade with other cryptographic tokens such as ETH, LTC. In fact, Ethereum (ETH) is actually a project under Bitcoin.

As a corollary, one can imagine Bitcoin as the key medium of exchange while all the other cryptographic tokens as its products. However, there are times when a particular pattern dominating in Bitcoin does not necessarily mean the same thing is happening in Ethereum. Research has shown that the likelihood of the spread of a similar pattern set by Bitcoin is quite high with Litecoin, rather than Ethereum.

2. Proven Stability Of The Bitcoin Infrastructure

Bitcoin as the first-ever cryptocurrency and blockchain company has been around for the past 12 years now. No other blockchain company has been existing for that long. Even though the market capitalization has decreased by a little over 10% over the past few years, this is mostly due to other blockchain companies that now have their booming business in this line of industry.

Even after many attacks and criticisms that this blockchain company has been facing, there is no denying that it has been quite successful in maintaining a very stable infrastructure. There is no other company that currently has the credibility to make a statement such as this.

3. Market Sentiment

This is one of the most important reasons if we are trying to understand the logic behind the similar patterns in all cryptocurrencies. Understanding a similar pattern is also about understanding the market sentiment. Market sentiment can be a viable indicator of what is going to happen in the near future of cryptocurrencies.

Research conducted by a team from Stevens Institute of Technology shows how social media discussions and debates can offer themselves as a little window to see how market sentiment is set.

It is often considered that social media personalities or influencers who engage with current news updates about cryptocurrencies are the sole contributors to set market sentiment on any given asset.

But much to our surprise, it is not the vocal minority that includes social media influencers, but the regular ordinary investor who engages the least in this respect who contributes more to set a market sentiment. Such a community of silent majority who often comment for the sake of sharing some genuine comments about their experiences is considered more dependable.

The upside of relying on this research is that it is research that has quite an extensive methodology. Not only had they considered over 3.4 million tweets under their wing, but also used language processing techniques on the various categories of comments based on their nature.

4. Influence Of The Early Traders

Some of the most technically aware investors that have made it to success usually have a huge impact on setting a dominant pattern in the top-most cryptocurrency networks.

Since this small community of successful investors are quite protective of their digital wallet that holds all their assets, they like to spread it out into smaller ones by depositing little in many other wallets.

Since most of them are investing in many other platforms and not just one, they create trends. Once they all start contributing, the particular asset that they are all betting on starts getting all the hype and boost. Once a trend is caught on and reaches a threshold high enough to be the talk of society, investors from all over the world, small or big, start acting on it too.

Closing Up

The most important thing is Bitcoin will be at the top of the scene for some time now unless Ethereum does come up with something that can seriously injure Bitcoin. In fact, Ethereum has already talked about launching its new upgrade, Ethereum 2.0, in which it will have a Proof-of-Stake (PoS) consensus algorithm. It will better the speed of transactions as well as decrease energy consumption. However, it is getting continually delayed.

Meanwhile, Cardano already integrated PoS before premiering but is still in its budding phase. As all other currencies are relatively very new, we expect that Bitcoin is going to rule the cryptocurrency world for some time. Educate yourself and keep an eye out for the kind of debates that go around to understand the current as well as future patterns. An informed investor is a smart investor.