With Bitcoin back below $ 10,000, the cryptocurrency market seems to stagnate around the $ 500 billion valuation. Ethereum has also fallen back below $ 900.
At the start of this year, the Bitcoin dominance index fell to 32%. This was the lowest level for a long period of time. This clearly indicates that other cryptocurrencies are gaining more prominence. It is not that a single cryptocurrency is gaining prominence. The diversity and versatility in the cryptocurrency market is reducing the dominance of Bitcoin. This is also affecting the movement in Bitcoin.
On a year-to-date basis, while you can argue that all the cryptocurrencies are down but in the last 3 weeks, Bitcoin has certainly outperformed. It has almost doubled to around $ 11,500. Since then, it has dropped back down to $ 9500.
Most of the traders are concerned about the short-term volatility. On the other hand, most of the investors are actually optimistic about the long-term returns which it can provide.
Moreover, the Segwit code is gaining more and more prominence. Coinbase recently announced that it will be supporting the Segwit code. This is the reason why Bitcoin is again expected to come to the forefront.
Major improvements in Bitcoin
With the help of Segwit code, Bitcoin transaction cost will be reduced, which is currently very high for regular, everyday transactions. It will also lead to faster transactions. This will benefit the Bitcoin investors as well as traders. The versatility of Bitcoin will also increase. More people will be willing to use Bitcoin as an actual currency in the way it was designed.
However, until Bitcoin becomes mainstream for transaction usage, volatility is here to stay. This is the reason why many of the investors are trading cautiously on Bitcoin.
With the help of Segwit, Bitcoin will also become more secure. This is slated to increase the activity in Bitcoin. As more and more businesses accept Bitcoin, it will become easier to induce more stability in Bitcoin. This will also attract long-term investors.
With consistent developments like Segwit, institutional investors will also think about investing in Bitcoin. This is the reason why it is slated to gain more prominence in the coming future. Several experts also believe, other cryptocurrencies like Ethereum also have a potential to provide high returns throughout this year. Of course, given the volatility in the past, even when investors share that optimism, they should tread with caution.