{"id":343807,"date":"2021-09-24T19:07:00","date_gmt":"2021-09-24T16:07:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\/"},"modified":"2021-09-24T19:07:00","modified_gmt":"2021-09-24T16:07:00","slug":"diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\/","title":{"rendered":"# Diminishing returns: Is Bitcoin underperforming compared to altcoins?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a307798d7a4e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a307798d7a4e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\/#2021_by_the_numbers\" >2021 by the numbers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\/#Why_are_altcoins_outperforming_BTC\" >Why are altcoins outperforming BTC?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\/#Is_100000_Bitcoin_still_realistic\" >Is $100,000 Bitcoin still realistic?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\/#Bitcoin_stands_firm\" >Bitcoin stands firm<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Diminishing returns: Is Bitcoin underperforming compared to altcoins? <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvZDNkYzQzYTktNzY4Mi00Nzc0LWI3YWYtZjM0NDNhNjJhYjA5LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>The first half of 2021 in the crypto markets brought many comparisons to 2017. Bitcoin (BTC) was on a tear to its all-time high, the new frontier of decentralized finance emerged, and nonfungible tokens were gaining myriad celebrity endorsements.\u00a0<\/p>\n<p>But after the initial months of euphoria and a subsequent sell-off, BTC\u2019s performance has been far more lackluster. The recent market sell-off resulting from the Evergrande crisis has compounded fears. However, it can\u2019t be ignored that many altcoins, particularly platform tokens, have undergone impressive runs and, in some cases, even bucked broader market trends.\u00a0<\/p>\n<p>With hopes still high that another bull run is likely during this halving cycle, should BTC holders be worried that the flagship asset is underperforming?\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2021_by_the_numbers\"><\/span>2021 by the numbers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Between January and reaching its all-time high (ATH) of nearly $65,000 in April, BTC posted gains of 113%. Based on current prices, the year-to-date (YTD) gains are around 45%.\u00a0<\/p>\n<p>By comparison, Ether (ETH) gained 497% between January and its ATH in May, while its year-to-date rose over 300% despite taking a recent battering.\u00a0<\/p>\n<p>However, even ETH\u2019s impressive gains are nothing compared to rival platform tokens. Cardano (ADA) has posted a staggering YTD increase above 1,000% while barely yet supporting any real activity. Solana\u2019s SOL has even dwarfed that figure by rising over 8,000% since January. This comes after dropping from its all-time high above $200. Honorable mentions go to Polygon (MATIC), Avalanche (AVAX) and Terra (LUNA), all of which have undergone impressive rallies in 2021.\u00a0<\/p>\n<p>Stephen Gregory, CEO of Currency.com, told Cointelegraph:<\/p>\n<blockquote><p>\u201c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a>ly, there is a lot of enthusiasm for Web 3.0, whether that\u2019s powering the metaverse with ETH, or much faster transaction times with SOL, or whatever the future holds for ADA. People see holding layer-one protocols as strong value picks for the future. Investing in sound tech and following the momentum and progression of the asset class following real-world use cases seems to be prudent.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Why_are_altcoins_outperforming_BTC\"><\/span>Why are altcoins outperforming BTC?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>On the face of it, the numbers do indeed seem to indicate that BTC is underperforming compared to other coins. One factor that could explain this is the law of diminishing returns. BTC is the oldest asset and twice the age of Ether. Although Bitcoin has delivered eye-popping returns during its lifetime \u2014 making billionaires out of early adopters \u2014 is it possible that the flagship asset can continue to deliver three- or four-figure returns as it ages? Given that Bitcoin\u2019s entire economic model is based around the principle of diminishing returns, with block rewards halving every four years or so, it seems plausible.\u00a0<\/p>\n<p>Moreover, as Cointelegraph has previously reported, as more investors and institutions pile in, Bitcoin has begun to mirror other assets. We can note this effect in the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.buybitcoinworldwide.com\/volatility-index\/\">dampening<\/a> of Bitcoin\u2019s volatility over time.\u00a0<\/p>\n<p>Arguably, the only reason that markets continue to grow is that investors continually seek out new assets of value. Therefore, while BTC <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to be delivering lower returns, it shouldn\u2019t surprise anyone that investors are interested in more volatile assets to profit from price movements.\u00a0<\/p>\n<p>But that leads to other questions: Is there a risk of creating a self-fulfilling negative cycle from BTC? As investors look to other assets to earn large gains, will BTC inevitably become less attractive?\u00a0<\/p>\n<p>Or, if we dare to imagine it, does the current appetite for platform tokens indicate that investors\u2019 sentiment toward Bitcoin is gravitating to the \u201cno intrinsic value\u201d argument? After all, stronger fundamentals and potential for adoption is perhaps the one big selling point that platform tokens have over Bitcoin.\u00a0<\/p>\n<p>Micha Benoliel, co-founder and CEO of decentralized Internet-of-Things network Nodle, believes that platform tokens have a bright future ahead, but perhaps not at the expense of BTC. He told Cointelegraph:<\/p>\n<blockquote><p>\u201cI think the market is just beginning to understand the value of blockchain ecosystems and services. That\u2019s why altcoins are performing so well. Bitcoin, which is more a store of value, is on its trajectory and is becoming a crypto asset class with less risk and for people with a long-term investment strategy.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Is_100000_Bitcoin_still_realistic\"><\/span>Is $100,000 Bitcoin still realistic?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>From another angle, even if Bitcoin returns are diminishing compared to their historical highs, gains continue to outs<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">trip<\/a> other assets, such as stocks and gold, by far. At the current rate of diminishment, BTC will continue to deliver superior performance for quite some time to come. As such, it seems unlikely that an exodus is imminent. Daniele Bernardi, CEO of investing firm Diaman Group, told Cointelegraph:<\/p>\n<blockquote><p>\u201cOf course, Bitcoin appears to be underperforming compared to small- and medium-cap coins in percentage terms. But don\u2019t forget the large difference in capitalization. If BTC prices increase by 10%, it would raise the market cap by $80 billion. If Solana, for example, increases by 100%, the real value in market cap goes up by $40 billion. For this reason, I don\u2019t think there\u2019s any basis for doubting Bitcoin or its position as the market-leading asset.\u201d<\/p><\/blockquote>\n<p>As far as the bull trajectory goes, it\u2019s also worth noting that in 2017, Bitcoin gained 1,900% between January and December. However, until now in 2021, it\u2019s only up around 450%. If prices do follow the same pattern, that will put us on track for a year-end BTC price of around $138,000.\u00a0<\/p>\n<p>That estimate is eerily close to the $135,000 year-end price predicted by the stock-to-flow (S2F) model, which continues to be the most accurate forecast of Bitcoin prices. Indeed, August\u2019s BTC closing price is, give or take, exactly as <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/100trillionUSD\/status\/1406577006230245376?s=20\">predicted<\/a> by S2F creator PlanB back in June, and September\u2019s could be on track to follow suit.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_stands_firm\"><\/span>Bitcoin stands firm<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The numbers illustrate that BTC\u2019s returns are indeed diminishing over time across consecutive bull cycles. But this shouldn\u2019t be surprising to anyone, considering Bitcoin\u2019s economic model. Micha\u00ebl van de Poppe, Cointelegraph contributor and full-time trader, agrees, telling Cointelegraph:\u00a0<\/p>\n<blockquote><p>\u201cInvestors shouldn\u2019t be worried. It\u2019s actually a natural habit of the markets to slow down and have lengthening cycles. This is something we will see more often in the future and will actually open up the gates for more investors. The less Bitcoin will be swinging around with their performance and daily movements, the better as an asset in your portfolio.\u201d<\/p><\/blockquote>\n<p>However, gradually decreasing returns should not detract from the fact that Bitcoin is, by any measure, delivering a healthy performance in line with even the most bullish forecasts. According to Igneus Terrenus, head of communications at Bybit, BTC is still by far the go-to coin for newcomers \u2014 institutions or individuals \u2014 entering the space. He told Cointelegraph:<\/p>\n<blockquote><p>\u201cBitcoin remains the best investment-grade crypto asset for institutional investors. And a relatively more stable ranging pattern may actually help Bitcoin\u2019s case as an alternative to gold and add fuel to its long-term rise. When one zooms out to five years or 10 years \u2014 horizons familiar to whales and institutional investors \u2014 Bitcoin returns beat everything.\u201d<\/p><\/blockquote>\n<p>It\u2019s also impossible to say whether any of the recent platform token rallies would have happened if BTC had been languishing in long-term bear territory, as money tends to flow down from BTC.\u00a0<\/p>\n<p>What\u2019s more, the models show that there\u2019s still every reason to believe in a year-end BTC price above six figures. Currency.com\u2019s Gregory agreed despite the increasing demand for platform tokens. He told Cointelegraph, \u201cBTC is outperforming the market but is currently being held back by macro market trends and events on Wall Street. However, historically, Q4 has been the strongest for BTC, and it is likely history repeats itself before the end of 2021.\u201d<\/p>\n<p>Nevertheless, while BTC is in no danger of losing its status as crypto\u2019s flagship asset, soaring altcoins undeniably offer bigger opportunities right now for those who believe they can time the markets.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/diminishing-returns-is-bitcoin-underperforming-compared-to-altcoins\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Diminishing returns: Is Bitcoin underperforming compared to altcoins? &#8221; The first half of 2021 in the crypto markets brought many comparisons to 2017. Bitcoin (BTC) was on a tear to its all-time high, the new frontier of decentralized finance emerged, and nonfungible tokens were gaining myriad celebrity endorsements.\u00a0 But after the initial months of&#8230;<\/p>\n","protected":false},"author":1,"featured_media":343808,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvZDNkYzQzYTktNzY4Mi00Nzc0LWI3YWYtZjM0NDNhNjJhYjA5LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74862,74937,74863,74860,82402,74892,117,73711,71407],"class_list":["post-343807","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-bitcoin","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-ether-price","tag-tokens","tag-business","tag-investments","tag-trading"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/343807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=343807"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/343807\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/343808"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=343807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=343807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=343807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}