As the world's first cryptocurrency, Bitcoin has captured much of the digital asset spotlight since its inception in 2008, serving as a digital store of value and inflationary hedge. The leading cryptocurrency by size has seen its market capitalization balloon as high as $1.44 trillion at its peak earlier in 2024. The price has since retreated from those high levels, and the value of the broader crypto market now hovers at approximately $2 trillion as of Sep. 12, according to data from CoinMarketCap.

Some BTC maximalists, as they're known, are convinced there's only room for one leader over the long haul, and that's Bitcoin, while all other coins will eventually fall by the wayside. With the cryptocurrency markets clearly evolving, now is a good time to explore whether Bitcoin will reign as the only trustless digital store of value or if there's room for other tokens to exist alongside it.

Multiple factors support the assertion that Bitcoin's dominance isn't likely to threaten the existence or success of altcoins.

Cryptocurrency Market Share Pie

It's undeniable that Bitcoin has played a major role in the growth of the cryptocurrency market. As the Bitcoin price has risen over the years, so too has the size of the broader digital asset market, fueled by Bitcoin on one hand and the performance of other tokens on the other. However, it's important to note that as of Sep. 12, 2024, Bitcoin's dominance hovers at less than 50% compared with 85% five years ago. As Bitcoin's dominance has been slipping, that of the altcoin market has been rising, a trend that is reflected in the below chart.

Take Bitcoin's halving events, a supply phenomenon that occurs every four years and tends to be bullish for the Bitcoin price. Leading up to and after the Bitcoin halving events of 2017 and 2021, the altcoin market cap expanded alongside a rising Bitcoin price. This suggests that investors were also looking for cheaper alternatives to the pricey leading crypto.

What sets Bitcoin apart from the pack is its inherent use case as a payment method. A common thread among seven of the top eight cryptocurrencies is that they each operate on their own unique blockchains. Other major blockchains more closely resemble Ethereum, the number two cryptocurrency by market cap that also serves as a decentralized virtual computer. This differentiator is a major driver of price for the underlying tokens.

However, these alone may not be enough to form a full picture of the altcoin market’s expected growth pattern. Therefore, let's explore some reasons to support this likely scenario.

Reasons The Altcoin Market Can Be Expected To Expand

Satoshi Nakamoto designed Bitcoin as a peer-to-peer digital currency whose transactions underpin the Bitcoin blockchain. However, with the combination of block-size limitations and a mandated supply cap of 21 million coins ever to be minted, Bitcoin soon evolved as a store of value as well, competing with conventional assets like gold.

Meanwhile, Ethereum, the number two cryptocurrency, was created with a different use case – as a decentralized virtual computer. Most other blockchains followed in Ethereum's footsteps, completing decentralized transactions using products known as smart contracts. Smart contracts became commoditized over time, growing in influence but declining in price. It's a similar phenomenon with other technologies like cars and cell phones, whose use case and price have gone in opposite directions.

Among the leading eight cryptocurrencies, one outlier is Tether (USDT), as unlike the others it is not a blockchain. One of the industry's first stablecoins, Tether was created as an ERC-20 token on the Ethereum blockchain with the primary purpose of payment and acting as a stable digital asset so investors can sidestep volatility. Its existence is a testament to the fact that decentralized virtual computer technology permits the separation of blockchain infrastructure from the underlying cryptocurrencies, the latter of which can perform independently.

This brings us to the Seasonal Tokens project, comprising four proof-of-work tokens – Spring, Summer, Autumn and Winter – that operate on the Ethereum network. Their relative prices take cues from one another over time. While Bitcoin's primary use case is money, and Ethereum's is a decentralized virtual machine, Seasonal Tokens aim to take the role of more of a trading instrument.

In the agricultural industry, farmers rely on the changing of the seasons to inform their growing and harvesting decisions as well as risk taking. Similarly, the nature of changing cycles in the relative prices of Seasonal Tokens guides traders in their decision-making process. One key difference between Seasonal Tokens and nature's seasons is that the crypto cycle unfolds for nine months at a time.

Bitcoin has already succeeded as the most trusted store of value cryptocurrency, earning the nickname of "digital gold." However, that is just fine with the altcoin market, as they are not vying for this title. Rather, they serve as a complement to Bitcoin by offering their own value and opportunities to traders.

Seasonal Tokens Built To Create Wealth

As Bitcoin's total supply shrinks every four years like clockwork, the economic incentives for stakeholders will pivot from mining to other things. For example, Bitcoin miners may shift their attention from mining new coins – their primary means of getting paid — to generating blockchain transaction fees for income. Given the blockchain's limitations on transaction speed, Bitcoin will likely be favored among major industry players, but potentially not for small transactions.

As for Seasonal Tokens, price swings serve as demand drivers for the foreseeable future until the mining supply is less influential. By this time, traders are expected to be incentivized to provide liquidity to decentralized markets as they profit from various blockchains such as Ethereum and Polygon while opportunistically trading price changes among the four Seasonal Tokens – Spring, Summer, Autumn and Winter.

In early September, Seasonal Tokens had a major event when the mining supply of the Winter token was halved. This event was a milestone for the project, ushering in the end of the first full period of halvings. Based on historical data, the project's leaders report that the mechanics of Seasonal Tokens are performing like clockwork: the Winter Token shows signs of transforming from the cheapest of the project's four tokens to the most expensive.

Traders may want to stay tuned if they'd like to participate in the synchronized Seasonal Tokens cycles.

If that sounds like you, click here to receive an exclusive Winter halving gift from Seasonal Tokens just for Benzinga's readers!

Featured photo by geralt on Pixabay.

This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.

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