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Top 3 Reasons Why Bitcoin Will Continue to Dominate

Bitcoin dominance 2020

The month of May catches Bitcoin with increased interest, given an event that could mark the beginning of a new bull run. With the halving getting close, retail and institutional investors had been increasingly active and pushed the Bitcoin price back towards the $10,000 area. Additionally, there are several more reasons to believe Bitcoin will be the market leader for as far as we can see and today we’ll talk about them.

Reason #1 Increased deflationary pressure

On May 12th the Bitcoin block reward will drop to 6.25 BTC and that means there will be less supply available with each new block created. As long as the demand for Bitcoin will remain elevated, that will act as a deflationary pressure and keep the market valuation high. The Bitcoin halving is one of the things to bear in mind in 2020, due to its ability to support the market cap and dominance in the next few years. Based on the data we have on the other two prior halvings, we should see a slump in price as the event approaches followed by the beginning of a new bull run in the next year or years and a half.

Reason #2 No other strong competitors

It’s interesting to note about the cryptocurrency market that 2018 had been a year of realization. Investors had become fully aware that most of the cryptocurrencies were actually scams and had started to pile into large-cap tokens. The main beneficiary had been Bitcoin, which had increased its market dominance from 32% to over 66% at the time of writing. At the same time, despite new promising projects being launched, none had proven to be able to challenge the Bitcoin supremacy. Being the first cryptocurrency ever created given it a huge advantage and trust.

Reason #3 Conservative risk sentiment

For the first time since 2008, we’re going to have a new economic downturn. The COVID-19 situation had literally smashed all the positive expectations for the year and now the rhetoric circles around how severe the economic pain will be. Since cryptocurrencies are volatile instruments, investors are very conservative when economic conditions deteriorate. That leads them to avoid taking the risk of investing in new projects and instead, they keep investing in cryptocurrencies that had proven to pass the test of time. Bitcoin it’s been around for 12 years and given the popularity it enjoys, we should expect it to be a market leader moving forward.

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