The public’s interest in Bitcoin hit a high, as its price continued to climb to a high of $20,000 in December. Bitcoin welcomed millions of users to the cryptocurrency realm, as proved by Coinbase’s and numerous exchange’s figures. Even though Bitcoin is the king of the coins it is still not enough to maintain the attention of the now large and diverse crypto community. So although Bitcoin may be the ideal coin to get high on cryptocurrencies, once users are settled, they begin to seek out other coins that are better suited for their needs or beliefs.
Bitcoin grabbed the world’s attention after offering incredible returns of 2,000% in 12 months. This moonshot in growth continued to increase interest in cryptocurrencies, sparking more growth in the massive hype cycle. Leading into December, the ‘Satoshi Cycle’ was in full effect as Google trends showed a strong correlation between Google searches and price changes. Nicholas Colas, a Bitcoin analyst commented that the total number of Bitcoin Google searches worldwide tripled that month.
You saw that correlates to the total increased number of wallet growth, which doubled in December from approximately 5 percent to 10 percent as Bitcoin rallied. – Nicholas Colas, Bitcoin Analyst
After taking this metric into consideration, it can be assumed that the new wave of cryptocurrency investors are dispersing their wealth into coins that are better fitting for their individual needs. As these new adopters become more educated in the cryptocurrency space they begin to diversify and pick out their favorite coins to invest in. This trend results in money being taken out of bitcoin and distributed into altcoins.
Bitcoin is considered the gateway drug to all cryptos and it has acted exactly that way. Right now [the Google search data] is telling me there’s not really that next leg up in Bitcoin because there’s not that interest that leads to wallet growth that leads to price appreciation. – Nicholas Colas, Bitcoin Analyst
Although money may be distributed to other coins in the cryptomarket, it is important to understand that Bitcoin’s price movements are heavily linked to all other coins. You may decide to place your money in smaller altcoins, but Bitcoin is the Gold standard in understanding how the entire market is fairing as a whole.