Introduction
Bitcoin opened the era of cryptocurrencies and is widely recognized as the "digital gold" with the strongest consensus. Despite the many innovative projects that have emerged this year, Bitcoin is still number one in market capitalization and has become the cultural symbol of the industry.
Bitcoin Dominance Index
As the first cryptocurrency, Bitcoin has become the world's largest cryptocurrency in terms of market capitalization and has long held more than 40% of the total market capitalization of the cryptocurrency market.
Due to its high market capitalization and the fact that prices are often representative of industry cycles and developments, the ratio of { Bitcoin Market Cap / Cryptocurrency Market Cap } has been defined as the Bitcoin Dominance Index.
When the Bitcoin Dominance Index is low, Bitcoin Dominance is relatively low, indicating that the cryptocurrency market is hot and investors are more interested in trying other currencies besides Bitcoin; while a high Bitcoin Dominance Index indicates that money is flowing from cryptocurrencies back to Bitcoin and Bitcoin Dominance is increasing, which is also known as Bitcoin's "blood sucking effect".
Witnessing the Rise and Fall of the Market
Bitcoin was born in the aftermath of the 2008 global financial crisis and has seen both price peaks and declines in the short 15 years since its inception. As of May 2023, Bitcoin remains the highest market capitalization cryptocurrency in the cryptocurrency market, with a current price of around $19,500 for a single bitcoin, and a market capitalization of $560 billion despite having fallen more than 75% from its previous high of 69,000.
Bitcoin's price is often influenced by politics, economics, and regulation, as well as market sentiment, and its price is often compared to the movements of several traditional financial market indices such as the S&P 500 and the NASDAQ. As a representative of the cryptocurrency market, the price of bitcoin has also risen and fallen with the market's rise and fall, and has also played a representative role in the market's rise and fall.
Digital Gold in the New Era
As the first grounded application of blockchain technology, Bitcoin has accumulated a broad consensus and a large community. In the cryptocurrency community, countless members firmly believe in the future value of bitcoin and will never sell it in the long run.
In addition, in real life, people's assets are affected by both the decline in purchasing power due to inflation and the loss of assets due to bankruptcies and failures of banks, trusts, and other institutions. It was out of frustration with this situation that Satoshi Nakamoto released "Bitcoin: A Peer-to-Peer Electronic Cash System" in 2008, and left a front page article in the then-Times headline: "UK Chancellor of the Exchequer faces second bailout of banks" in the Genesis block after Bitcoin went live in 2009. ", in an allusion to the fragility of the banking system.
While the total number of bitcoins is fixed at 21 million, there is a clear and fixed supply, increasing by 6.25 BTC in about ten minutes, halving production every four years, or a decentralized, uncontrolled system, so bitcoin is seen as a new-age "digital gold" for fighting inflation and storing value.
Disclaimer
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Crypto investment involves significant risks. Please proceed with caution. The course shall not be considered investment or financial advice.