Bitcoin in The Driver’s SeatEthereum (ETH) has been on top this week, in terms of gains, and Litecoin (LTC) has led previous rallies, but researchers at Blockchain.com are anticipating that Bitcoin will continue to drive the overall price action in the cryptocurrency market.
In its latest monthly newsletter, the cryptocurrency exchange and wallet provider summarized that the crypto markets have recovered since their mid-March crash. It added that Bitcoin dominance, which is currently at 65.2 percent according to Tradingview.com, will continue to increase throughout the coming year. The research attributed positive on-chain metrics to this, stating that the hash rate has already begun to rebound — thanks to Bitcoin’s price recovery and the downward difficulty adjustment. Hash rates have already climbed back over 100 EH/s, which is not far off their all-time peaks. The report added that less-efficient miners may be forced to sell more bitcoins due to depressed price levels and the halving, which is coming in 35 days’ time. This would have a positive effect on ‘stronger hands’ in the mining ecosystem, as they may face less pressure to liquidate their holdings, thereby reducing downward price pressure. Other metrics, such as hash ribbons, also indicate that there will be no further mining capitulations and the ‘weak hands’ may have already powered down their hardware while they wait for a price recovery. The report also attributed a strengthening ‘digital gold’ thesis and status as an emerging macro hedge to future Bitcoin performance. Blockchain maturity, when compared to other digital assets and more fiat on-ramps, are also contributing factors to the asset’s dominance for the year to come.
(5/5) We anticipate bitcoin (BTC) to continue to drive the overall price action in crypto.— Blockchain.com (@blockchain) April 7, 2020
Still a Safe HavenThe newsletter concluded that March was one of the most turbulent months in financial market history. Bitcoin managed to outperform equities but was beaten by gold’s gains as it remains the world’s safest haven. Other analysts, such as chart guru Willy Woo, still maintain that Bitcoin is a safe haven. His latest charts compare Bitcoin’s value growth versus other assets and have been plotted logarithmically over the past decade.
It does appear, from these charts at least, that Bitcoin has been a more stable investment with greater value growth when compared to the S&P 500 and real estate.
And they told me Bitcoin was a risky volatile asset…— Willy Woo (@woonomic) April 7, 2020
(Plotted in log charts so % gains/losses are proportional within each respective sparkline) pic.twitter.com/qxC1xF8cay