Bitcoin (BTC) is the gateway to the altcoins market, according to a new Coinbase study. This research found that 60% of users buy Bitcoin as their first crypto purchase, but only 24% of investors still believe in Bitcoin.
Most customers buy Bitcoin and then switch to altcoins. Source: Coinbase
Investors seem more willing to consider altcoins during a bullish hike, for example when Bitcoin’s market dominance fell below 30% during the ICO fever in 2017 on Coinbase. For a short time, Ethereum was the dominant asset on the platform with around 50% of the trading volume.
Justin Martin of Coinbase Corporate Development explained the mood behind this behavior in Around The Block:
“This can be for a variety of reasons, but one is largely psychological. Because people are comfortable with their initial cryptocurrency investments (in Bitcoin), they branch out to find other potential categorical winners (as the 2017 surge shows) . “
A drug that continues to work
Others noticed that Bitcoin has acted as a “gateway drug” for other cryptocurrencies in the past. Nick Colas, a Bitcoin analyst, said in an interview with CNBC Enthusiasm during the 2017 climb “now has become insane … I think of Bitcoin as a kind of entry-level drug“”
In June 2019, Bloomari Markets, co-founder and CEO of Messari Inc., Ryan Selkis, suggested that the Facebook’s pound could act as a “gateway drug” for cryptocurrency investors and potentially lead to Bitcoin.
Bitcoin’s dream as digital gold
During bear markets and eerie times Investors are turning to Bitcoin as a “first-class good for cryptocurrencies”..
The report suggests that Bitcoin is moving towards its vision of becoming digital gold as altcoins are valued for its other services::
“As we believe that alternative assets and networks will offer differentiated services (beyond the value reserve and bitcoin-focused digital gold), it will also be important for the industry to build support for these other assets.”