Would you prefer to be the dominant player in a stagnant industry or a strong leader in an ever-increasing market sector?

For a short period, Bitcoin ( BTC -1.12%) was the only crypto that mattered. For several years after its debut in 2009, there were no rivals or competitors to Bitcoin. In 2011, altcoins began appearing and blossoming, but Bitcoin retained its stranglehold on the market. In April 2013, Bitcoin had more than 90% of the entire sector value in cryptocurrency.

A shrinking market slice…

The percentage of Bitcoin’s price that the leading cryptocurrency, in terms of market capitalization, has dropped over time as thousands of alternative cryptocurrencies gained market share from the original and most well-known crypto name. Today, Bitcoin’s dominance stands at around 42 percent:

Yes, you could make the case that Bitcoin’s influence in the crypto market is declining over time. That’s only natural as the sector matures; global citizens become more comfortable with the concept of a cryptocurrency and the underlying technology advances.

Bitcoin was never intended to handle smart contracts, non-fungible tokens, or high volumes of financial transactions. Instead, it was created to serve as a long-term store of value, similar to digital gold bars rather than electronic dollar bills.

…in an explosive growth sector

From this standpoint, Bitcoin is doing just fine. The value of the bitcoin market has grown from $1 billion in 2008 to $896 billion today:

Bitcoin has increased the size of a billion-dollar market by 90%, turning it into a 42% share in a much more developed market with a value of $2.1 trillion today. I don’t consider that to be disappointing. It’s just an ordinary, predictable, and healthy process.

It’s still early days for cryptocurrencies as a whole, and for the grandfather of them all in particular. Cathie Wood’s Ark Invest team forecasts that Bitcoin will be worth approximately $29 trillion at the end of this decade. That goal assumes a final value of $1 million per BTC token, up from $47,400 today.

Bitcoin’s percentage of the overall crypto market, on the other hand, is expected to continue declining for years. That’s not an issue as long as the digital currency grows while the whole sector flourishes.

Author: Steven Sinclaire

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