Ryan Selkis, founder of blockchain data analytics firm Messari, says Bitcoin is a “back bet” for 2022 – meaning Bitcoin is likely to underperform in terms of performance in the area where it has long been dominant.
Ryan Selkis – Founder of Messari
Selkis argues that the dynamic in the crypto industry has changed, with investors pumping a lot more money into assets with better short-term returns, while BTC maximalists continue to focus on BTC and Ethereum supporters on ETH.
He calls this type of investor “crypto mercenaries” or “degens” for common BTC users. They typically target emerging Layer 1 digital assets like Solana (SOL), Terra (LUNA), and Avalanche (AVAX) – the trio that have now reached meme status as SoLunAvax.
According to some data, SoLunAvax withdrew a large amount of money from Ethereum in the last year and it is likely that BTC will come next. Several other emerging blockchains, including Cosmos, Near, and Polygon, have also captured significant market share.
Selkis said there is a small group of other investors who “would never choose BTC”. He calls these people “generalists” and they like anything but Bitcoin. In fact, “generalists” are drawn to a combination of Layer 1 assets, DeFi, and others.
With this in mind, Selkis believes that “BTC is the reverse bet of the year,” according to a post recently on twitter.
Bitcoin dominance is falling
While some experts predict that BTC price will hit $ 100,000 this year due to increased adoption by institutional investors, Ryan Selkis made no price comment.
However, this trend suggests that BTC’s market share will continue to decline by 2022, perhaps as low as 10%, as one analyst says. suspect.
BTC’s market dominance over altcoins – essentially any other crypto asset – is currently 39.65%, its lowest level since June 2018.
The data shows that more people are giving up bitcoin and switching to altcoins, in line with Selkis’ “back-game” prediction.
Alternatively, declining dominance could be a sign that some altcoins, especially Layer 1 blockchains such as Terra, Fantom or Avalanche, are decoupling from Bitcoin’s price movement.
“One of the obvious reasons for this is that bitcoin cannot grow as an efficient asset,” said analyst Austin Barack. said.
Bitcoin failed to encourage developers to create more useful protocols and applications.
It is also struggling to cope with the increased volume of transactions, while a host of other blockchain networks can improve it. As newer networks grow, Bitcoin risks losing more if the maximalists don’t catch up with change.
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