Altcoin News: Research: The Real Market Share of Bitcoin May Exceed 90%
August 22, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
The real share of Bitcoin in the market may exceed 90%, writes Forbes, citing the results of a study by Arcane Research. According to CoinMarketCap, the Bitcoin dominance index is currently around 69%.
Arcane Research analysts say that when calculating an indicator, liquidity must be considered first.
“The main reason is that one could easily create a cryptocurrency with 1 billion premined coins, and do one trade at say three dollars each,” reserchers wrote. “This would lead to a total market capitalization of $3 billion, which would represent 1% market dominance with today’s valuations and inflate the total market capitalization.”
When conducting the study, Arcane Research focused on the volume indicator to re-calculate the market capitalization of cryptocurrency assets. They assume that more advanced metrics can be used to achieve a more accurate result.
Nevertheless, the described methodology allowed them to get an estimated indicator of the superiority of Bitcoin over a wider market at 90%, which is more than 20% higher than the values from other sources. Stablecoins were excluded from the calculations, since, according to Arcane Research, they do not compete with cryptocurrencies characterized by increased volatility.
According to the authors of the report, the data obtained confirm the version that the role of alternative cryptocurrencies continues to decline. The network effect leads money to where liquidity decides, they say.
This data may be of interest not only to investors but also to developers of payment infrastructure, Arcane Research writes, adding:
“It is notoriously difficult to compare and contrast different projects targeting different niches.”
“Every quantitative measure will at best be a proxy and always brush over important qualitative differences. For crypto, one could argue that the whole idea of measuring the relative strength of different coins and tokens falsely implies a competition between complementary solutions.”
Author: Marko Vidrih
