‘ALTCOIN’ FRENZY BATTERS BITCOIN’S MARKET SHARE
Bitcoin’s smaller rivals are eroding its share of the $2 trillion digital currency market. Of the dozens snapping at its heels, most have little use beyond financial trading - but few of the investors fueling their rise seem bothered, Tom Wilson reported for Reuters.
Among the major "altcoins" - as all cryptocurrencies aside from bitcoin are known - some such as ethereum aspire to be the backbone of a future financial system. Others, like Dogecoin, have no such ambitions, and are barely used in payments or business.
For the army of retail punters pouring money into them, their backstory - and the inherent volatility that exposes those who invest in them to potentially heavy losses - often matter little.
Instead, buyers see the chance of quick profit, or at least an entertaining ride.
Along with prospects of fun and gains, however, altcoins are plagued by volatility.
Such swings in price can leave investors heavily out of pocket and, unlike bitcoin and depending on the regulatory framework of the exchange on which they are bought, many can only be swapped on exchanges for other digital coins rather than cashed in for hard currency.
As investors pile into rivals, Bitcoin's share of the crypto market has slumped to around 45% from 70% this year, according to US researcher Coin Metrics, while its trading volume share at major exchange Binance has halved to 23%, data provider CryptoCompare says.
Its market cap remains around $800 billion and, while all cryptocurrencies continue to operate outside the mainstream global financial system’s regulatory framework, it is more widely accepted for payments than its peers.