Altcoins fundamentally stronger than 2017–2019

While Altcoins SEEM to have underperformed Bitcoin so far in 2019, a different and much more POSITIVE story emerges when we peel back the layers.

Check out the strong inverse relationships between BTC dominance and Altcoins Market Cap during the period of December 2017 to September 2018 (data source: coinmarketcap.com)

- When Bitcoin dominates, Altcoins Market Cap falls

- When Bitcoin weakens Altcoins Market Cap rises

During the above period, funds were switched between Bitcoin and Altcoins, suggesting that Bitcoin dominance was essentially funded by a switch out of the Altcoins market, leading to a fall in Altcoins market cap.

Interestingly, this inverse relationship has weakened during the earlier 2019 rally. During this period, an increase in Bitcoin dominance is accompanied by relatively stable (rather than a collapse) Altcoins market cap, as depicted in the chart.

THIS IS IMPORTANT as this pattern suggests that the Altcoins market is retaining its market cap DESPITE increased Bitcoin dominance in 2019. This also implies an INCREASED overall fund flows into the crypto market while reflecting investors’ cautious confidence towards the Altcoins market.

So yes — while Bitcoin outperformed Altcoins YTD, they are FAR from being down and out.

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