After Bitcoin's historic rise in valuation, many tech-savvy investors and financial analyst saw the cryptocurrency and the media frenzy that surrounded it as their ticket to fame and fortune. Following a massive dip in valuation, however, and news that many counties and institutions in the world are set to scrutinize Bitcoin heavily, if not outright ban the currency, many are starting to change their minds.
Increasingly, investors are asking themselves if many of Bitcoin’s leading rivals, like Ethereum, are a stronger cryptocurrency investment than the fledgling currency that started the modern cryptocraze. So what’s the truth behind Bitcoin’s future, and do its competitors have a hope of dethroning the current king of cryptocurrency?
Heading for troubled waters
The most important thing to consider when evaluating the potential of Bitcoin’s competition is the current state of the cryptocurrency market. While increased attention from Wall Street and a maelstrom of front-page attention from the global mainstream media has made Bitcoin a household name, other competitors like Ethereum are starting to build recognizable brands for themselves, too.
Only Bitcoin enjoys massive popularity and a high valuation, however, which doesn’t necessarily play into the cryptocurrency’s favor. South Korea, for instance, is considering banning Bitcoins entirely, a move that’s already sent chills throughout the market and has many wondering about future sanctions Bitcoin’s holders might have to navigate around.
While the future isn’t set in stone, and Bitcoin and its proponents still have plenty of time to convince mainstream institutions and financiers that it can be welcomed with open arms into the market, it’s not unfair to say that Bitcoin’s own popularity may have spoiled much of its potential. Bitcoin has become more of a speculative asset than a currency to many, and its now infamous volatility stands to scare off as many cautious investors as it does attract the bold ones.
Amidst all of the increased regulatory scrutiny Bitcoin will have to deal with as it grows in popularity and value, its competitors will constantly be snapping at its heels, waiting for their day in the sun. The ongoing cryptocraze has shown that there’s a staggeringly large amount of money to be made out there, provided you have some capital and the knowhow to use it when it comes to these digital currencies. As Bitcoin is about to find out, many of its competitors will lure away some of its longtime backers, and will continue to siphon away newcomers to the cryptocurrency scene as well.
Chased by the competition
It can be said that Bitcoin’s historic, almost overnight surge in popularity was the cause of many of the regulatory woes its currently undergoing as financial institutions everywhere rush to clamp down on it. Similarly, its rabid popularity amongst cryptocurrency-focused investors has driven a surge in its market-based competition as well, as other companies hope to get in on the digital gold rush Bitcoin can be argued to have started.
While the existence of competition shouldn’t make any rush to abandon Bitcoin overnight, it’s fair to say that leading competitors like Ethereum are rapidly gaining userbases of their own, and will continue to grow in popularity at Bitcoin’s expense. For investors looking for a more stable cryptocurrency that won’t tank (or rapidly surge) based on internationally-focused news like Bitcoin will, these competitors will offer an invaluable alternative.
As the list of viable alternatives to Bitcoin grows, expect much of the financial clout that follows the world’s leading cryptocurrency to go with it. It would be foolish to insinuate that competitors like Ripple will slay Bitcoin’s reputation overnight, or that its investors will abandon it easily, but it’s no far reach to say that Bitcoin’s best days may have been behind it. As the market price behind Bitcoin reaches new heights, investors with a newfound interest in cryptocurrencies will likely find themselves looking for cheaper alternatives, meaning other common cryptocurrencies or newcomers can offer them better deals.
As blockchain technology continues to become far more advanced and cheaper to produce overtime, expect the technical capabilities of Bitcoin’s competitors to grow, too. The democratization of the same tech that powers bitcoin will inevitably see it become cheaper, meaning many competitors who lack the reputation or capital that Bitcoin and other leading cryptocurrencies do will still find themselves capable of growing and attracting a userbase. Bitcoin’s days may be far from over, but its proponents would be foolish if they weren’t cautiously looking over their shoulders for growing threats to the currency. Ultimately, many of tomorrow’s investors will find themselves incredibly pleased that they decided to back some of Bitcoin’s competitors. These so-called “alt-coins” are only growing in popularity, and will soon become commonplace alternatives to Bitcoin. As Bitcoin continues to capture headlines, expect its competitors to keep capturing a greater share of the market, moving in on Bitcoin’s turf.