The last two years have been crucial to understanding major crypto-assets from a fundamental perspective, as well as from the perspective of market activity. Bitcoin, the world’s largest virtual asset, has been able to break away from the crypto-bubble narrative and even though speculation still played an important role in the market, other tangible factors are now considered while predicting the price of Bitcoin.
A recent Bloomberg report suggested that over time, Bitcoin is decreasing its dependence on various factors and assets, most notably Tether, and inclining towards relative crypto-stability.
2018 marked a bearish period for the collective crypto-market and 2019 is widely considered by many to be a break from it. According to the report, Bitcoin is currently on its way to overcoming the midpoint of 2018’s slump. However, other major crypto-assets have not been reflecting the same characteristic. The report said,
“Our graphic depicts the Bloomberg Galaxy Crypto Index (BGCI) mired below the 25% recovery mark of the bear market. Emphasizing the key issues with most cryptos — rampant speculation and excessive volatility.”
Despite Bitcoin gaining strong independent credentials, the market capitalization of the largest stablecoin has continued to prosper. Tether’s market cap has surged from $1 billion to over $4 billion, at press time, since the end of 2017.
Recently, Tether’s valuation was widely criticized due to the Bitfinex episode. However, it is still a favorable asset, especially with respect to its use for crypto-asset transactions. Alongside Bitcoin, Tether also registered significant market adoption in 2019.
The report highlighted that besides Bitcoin’s market, the collective altcoin market had little chance to record a higher valuation in the near-term. Most assets are dependent on Bitcoin, which itself might be emulating the properties of gold. The report added,
“The Bloomberg Galaxy Crypto Index (BGCI) should remain in a subdued performance pattern that corresponds with most markets faced with such rapidly increasing supply.”
Additionally, the analysis stated that Bitcoin needs to re-test its all-time-high to initiate an upside for the rest of the market.