Bitcoin is a Blue-chip Asset and Decentralized Exchanges Already Disrupted Centralized Exchanges, Says Coinbase
Recently, Coinbase carried out a research calling Bitcoin a blue-chip asset. It was reported that its position as a blue-chip asset is still undisputed and there is a trend where bull markets exhibit rising traction among alternative assets.
The report says this may be due to several reasons, but majorly has to do with psychology. Investors seem more willing to consider altcoins during bull runs, like the time the market dominance of Bitcoin declined beneath 30 percent on Coinbase during the ICO craze and Ethereum run in 2017. Briefly, Ethereum maintained dominance on the platform with about 50 percent of the trading volume.
“This increasing drive is in part due to Coinbase’s continued addition of new assets, but a deeper cut shows that price volatility significantly swings consumer behavior toward non-BTC assets. This trend first appeared in 2017, and is now evident in large spikes. Notably in late 2019 (with Tezos, Chainlink, BAT, 0x, and Stellar) and again in early 2020 (driven by Ethereum, Tezos, and Chainlink).”
According to the report, 60 percent of users purchase Bitcoin as their first cryptocurrency purchase, while 24 percent of investors continue to believe in Bitcoin. Generally, more than 75 percent eventually buy other assets.
Coinbase reported reasons for Bitcoin’s dominance in the first place and number one is because it is disrupting money, and is the world’s first currency with a truly fixed supply. It is a pioneer and carries the most traction; it is the most secure PoW asset; it is not easy to quantify, but it is decentralized with the most nodes. It has the most mature services and the deepest pools of liquidity; its technology is already able to achieve its mission.
According to the report, Bitcoin is getting closer to becoming the digital gold, as altcoins are prized for their other services. It mentioned the shining of decentralized exchanges where centralized exchanges struggle and this is because the former are safe, global and permissionless, easy to use and pseudonymous, and potentially have enhanced execution.