The well-known US exchange Coinbase announced earlier this week that their users tend to switch from Bitcoin Bitcoin to altcoins after entering the “bull market”.
As published on the blog on May 13th, Coinbase stated that 60% of all users started buying Bitcoin. However, once the price has risen across the entire cryptocurrency market, only 24% of users have continued to “buy and hold”.
Bitcoin is known for its volatility. As we all know, the Pioneer digital assets moved a few percentage points each day and even fell by as much as 50% during the “Black Thursday” period in March 2020.
But altcoins are even notorious. Currencies with a smaller market capitalization can experience huge price spikes for larger buy / sell orders, mainly due to their poor liquidity and limited pricing. This behavior tends to attract a large number of traders who want to make quick profits.
The New York-based crypto exchange said that after making profits through the initial Bitcoin position, investors turned to “other” profit channels. This includes coins such as LINK, Litecoin, BAT and altcoins from other exchanges, although their claims cannot be verified independently.
Coinbase added:
“On average, Coinbase customers trade non-BTC assets at a ~3% higher rate than their relative market caps would suggest.”
Bitcoin remains the preferred cryptocurrency for merchants due to its inherent features (like decentralization and security) and external factors like market liquidity and the highest retail awareness.
“Bitcoin is king, and likely to remain king for a long time. But it is also paving the way for a thousand flowers to bloom,” the blog concluded.
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