Is Bitcoin Still King?First off, let’s get one thing straight: the report confirms that, yes, Bitcoin (BTC) is obviously still the king of the cryptocurrency market. USD returns for the top 30 cryptoassets by market capitalization were found to be highly correlated in the past three months (from December 2018 to March 2019). There is some evidence that the rest of the cryptocurrency market is partially decoupling from Bitcoin, however. The Binance report found that cryptoasset returns relative to BTC were much less correlated in 2018 than they were in 2017. Interestingly enough, during this same period, the correlation between large market cap cryptocurrencies with USD values became more correlated. This trend, the report finds, has continued into 2019. Well, that’s confusing — so what can we make of all this?
Bitcoin Trading Pairs Are on the DeclineThe report highlights that Bitcoin trading pairs are significantly dropping in relevance — which makes sense. Stablecoins have become more and more popular, especially with the release of Gemini Dollar and others like it to rival Tether (USDT). So, Bitcoin may still be the king leading the market, but it is no longer king in dictating trading pairs. This, in and of itself, is a development that only started in 2018— during the bearish market. The report seems to conclude that stablecoins have had a significant impact on overall market structure. The Binance report also found other trends worth mentioning. For example, coins with similar consensus mechanisms correlated in price movement. Proof-of-work (PoW) coins tended than to exhibit higher price correlations among themselves than non-PoW coins. The report also mentions another obvious project-specific price catalyst: exchange listings. Of course, the so-called “Binance Effect” can’t be ignored — which generally leads to significant price hikes as liquidity increases. [bctt tweet=”So, Bitcoin may still be the king leading the market, but it is no longer king in dictating trading pairs.” username=”beincrypto”] In conclusion, you should still be watching Bitcoin (BTC) to understand where the market is headed — while also keeping in mind that it might be smarter to start trading relative to USD as opposed to BTC. Any thoughts on the report? Do these findings surprise you? Let us know your thoughts in the comments below. Disclaimer: This article is not financial advice and should not be misinterpreted as such.]
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