From the moment of its establishment until now Bitcoin has entered a level of value unattainable for them cryptocurrencies. Is there a limit to this increase, will any cryptocurrency ever get close to the price environment that BTC has set and the most important, will it always dominate the competition?
The big advantage of Bitcoin is that it was present as the first on the new market, in total he created it. That is why it allowed him to accumulate such a large capital and achieve such a high price. At present the situation is completely different. Altcoins are beginning to play an increasingly important role, and names such as Ethereum, Ripple, Litecoin can almost be exchanged with Bitcoin. It would seem that cryptocurrencies on the market are not a threat to him. However, it should be remembered that competition with much better performance may appear and even they can deprive Bitcoin of its dominant position.
The popularity of cryptocurrencies.
As public awareness of cryptocurrencies increases, interest in buying individual assets will increase. In the first place it will be Bitcoin, but when the last blocks will be mined and the price will increase significantly and then there will be stagnation and eventually a decrease. Why will this happen? Well, most people buy cryptos to make money and not pay with them. If Bitcoin reached the level of 30 or 50 thousand USD for a token, buying fractional parts of it will cease to be profitable, because a specific profit would only be possible with large increases. The second reason is the resource or lack of it. If the demand will grow and the resource will be constant (because all tokens have been extracted) then the purchase will be more difficult. As a last resort, some will sell their resources and transfer their capital to another place or leave the market completely. You should also remember about big fish, who can deliberately lower the price by bringing large quantities of BTC to the market to cause panic, which results in mass sales and falling prices.
Development of the cryptocurrency market
Bitcoin’s situation can be compared to Apple’s when they released their first iPhone. The competition for the iPhone was in its infancy at the moment and Bitcoin did not actually have it. However, one factor was in the fact that the product with the logo in the shape of a bitten apple does not dominate over others, namely it was a great capital and time. After the premiere of the iPhone, the big electronics companies immediately started working on their smartphones, because they were sure that this investment would pay back. However, in the case of Bitcoin, conditions did not happen immediately after only a few years, which is why we are currently in this situation. When large capital flows into the crypto market, the whole market grows, new projects financed by these investors will arise and BTC’s dominance will be interrupted.
Government policy on cryptocurrencies
The government is not bothered by the existence of cryptocurrencies that increase in popularity, which could lead to the abolition of their money from a pedestal. This is important from the point of view of maintaining power over society by controlling money. At the moment when most people in a given country stop using the local currency (dollar, pound, zloty, etc.), the government loses its part of its driving force and perception as someone important. A scenario in which the state currency will be used solely for the purpose of exchange for cryptocurrency is not excluded. For example, you receive payment in dollars for your work, after which you exchange them or part of them for Libra altcoin from Facebook or a crypto created by some other corporation, e.g. Volkswagen. It is not important at the moment whether this would be a win-win situation or not. Certainly not from the government’s perspective, which is why it will take action to prevent this. The policy of the authorities may be important for maintaining Bitcoin’s dominance on the market through measures limiting the inflow of investments in this sector.
As you can see, Bitcoin’s position is not endangered so far, but nothing lasts forever, so a fall or fall must occur. Mainly due to technological development and projects that will arise and will have an advantage due to new opportunities that Bitcoin did not have.