Bitcoin is the most widely used digital currency since it first appeared in 2010. However, with the advent of new cryptocurrencies, its market share has significantly declined.
But the cryptocurrency market has continued to witness a boom despite the pandemic.
As a result, several newer forms of cryptocurrencies have emerged during the pandemic to cater to the increasing demand of cryptocurrencies.
But, what is the reason behind the decline in market share of Bitcoin? Here’s everything we know.
What Are Cryptocurrencies?
Cryptocurrencies are digital currencies, which use strong cryptography to secure online transactions. There are various types of cryptocurrencies, such as Bitcoin, Ethereum, Stellar, Ripple and many more.
These digital currencies are developed with mining techniques. This process involves solving complex mathematical problems.
Currently, other cryptocurrencies, including Bitcoin, have very limited use as a means of trading but given the future prospects in terms of investment, investors are showing great confidence in cryptocurrencies.
Cryptocurrency Market Size
After Billionaire and SpaceX Founder Elon Musk invested $1.5 billion in Bitcoins, several other crypto currencies have gained massive traction.
According to the CoinMarketCap, a crypto price tracking website, the current market capitalisation of all the cryptocurrencies is close to US $11.6 trillion .
As of March 2021, a total of 8,697 cryptocurrencies including Bitcoin, are in circulation.
Bitcoin’s Market Size
Bitcoin was traded for the first time in July 2010. At that time the price of one bitcoin was $0.08.
As of May 2013, Bitcoin had a 94% share in the cryptocurrency market. However, the market share then declined to 86% in February 2017.
With the rise of new cryptocurrencies, the share of Bitcoin continued to decrease further. As per Coinmarketcap on 5 March 2021, Bitcoin’s market share went down by 60.7%.
Bitcoin's Competitors
Ethereum is the most popular cryptocurrency after Bitcoin. Its share in the crypto market is currently 11.7%. Ethereum has been in business since 2015.
Tether is the most popular cryptocurrency after Bitcoin and Ethereum. Tether has a market share of 2.5% by value. Trading in Tether began in 2015.
Cardno is the fourth most popular cryptocurrency. The market share of this currency, which came into trade since 2017, is currently 2.36%.
The market share of Binance Coin is very close to Cardno. This digital currency holds 2.35% share in the crypto market and has been in business since July 2017.
Some other crypto currencies such as Altcoins, Polkadot, XRP, Uniswap, LiteCoin, and Chainlink also hold a significant position in the cryptocurrency market.
Decline in Bitcoin’s Market Share
With the advent of new crypto forms, the competition in the crypto market for Bitcoin has increased. There are several reasons behind the decline in the market share of Bitcoin.
- Bitcoin’s regulatory and valuation concerns are rising. A new report suggests that Bitcoin could be made illegal in India.
- Bitcoin’s market is extremely volatile, this is also one of the most important reasons for Bitcoin’s decline.
- According to investors, Bitcoin is overvalued, and investors are now turning to other forms of cryptocurrency.
- Other forms of cryptocurrencies give better transaction and withdrawal speed, forcing investors to switch to other crypto forms.
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