When you speak about cryptocurrency, most people will immediately associate the word with Bitcoin. The leading cryptocurrency is the most recognized and the biggest of all the cryptocurrencies in existence.
The general consensus in the crypto world is that there are two types of cryptocurrency, Bitcoin and everything else. The rest of the cryptocurrencies are collectively referred to as altcoins and that group usually performs in a similar fashion on the markets. While Bitcoin behaves independently of the rest of the market and sometimes even controls how the rest of the cryptocurrencies behave, altcoins will, more often than not, rise and fall as a group.
Third Option Developing?
Although the two “groupings” of cryptocurrency have been accurate, a third “group” might be developing. According to a recent report by SFOX, Ethereum may have moved away from sharing tendencies and characteristics with altcoins and is showing signs of being closer to Bitcoin than to the rest of the altcoins. This report was compiled according to the crypto trading trends in July.
If Ethereum continues on the trajectory it is on, experts say that it may no longer be classified as an altcoin in the near future. The aforementioned report states that Ethereum is coming into its own as a blockchain which is publicly recognized as an asset on its own, much like Bitcoin. If the recognition grows further, classifying the crypto as an altcoin will be inappropriate as it will no longer be in the same league as other crypto assets that are not Bitcoin.
The altcoin category contains a vast number of cryptocurrencies. These cryptos usually behave the same on the markets and although their independent values may differ, theses coins share similar market trends most of the time. The similarity in trends is especially true for large cap altcoins which will rise and fall together according to how the markets are behaving on a particular day.
While altcoins are many in number, many traders and investors view and use them as nearly interchangeable entities. This is because their market value is usually dependent on each other and hence, one can be easily traded for the other and one would still maintain a certain trading wave. For many investors, altcoins are just a method through which one can get acquainted with crypto trading and investors are not usually interested in the particular coin.
New Era Of Crypto
In the case that Ethereum does break its ties with altcoins and forms a class of its own, it would usher in a new era in the crypto world. Not only would traders and investors find new crypto to take seriously but the crypto markets would experience never been seen before trends. It might also provide other altcoins with a pathway that can be followed for them to break away from the altcoin category.
For Ethereum to achieve this, it needs to develop more defined use cases. Bitcoin is separated from other cryptocurrencies due to its easily discernible use cases and people know about these. This enables Bitcoin to be able to make a strong hedge when markets are going down. Soon, traders may be looking towards Ethereum trading if the coin maintains its trajectory.