Bitcoin acts as a bridge to altcoins, according to a study by Coinbase.
Most consumers buy Bitcoin and then switch to altcoins. ”- Coinbase
Investors seem to be more interested in the altcoin market during a bullish market, as happened in 2017 when Coinbase’s Bitcoin dominance fell below 30% during the ICO mania. In short, Ethereum was the platform’s dominant cryptocurrency with about 50% of the trading volume.
Justin Martin of Coinbase Corporate Development tried to explain this behavior.
“This may be due to a number of reasons, but one is psychological. Once people are satisfied with their initial crypto investment (in Bitcoin), they start looking for other potential winners (as apparently happened during the bull market in 2017).
During bear markets, people turn to Bitcoin. The report claims that BTC is moving towards becoming digital gold.
“As long as we believe that alternative assets and networks will offer differentiated services (beyond the value and digital gold that Bitcoin targets), it will be important for the industry to support these other assets as well.”