San Francisco-based cryptocurrency exchange Coinbase has released research showing that the flagship cryptocurrency bitcoin acts as a gateway for investors to get into other cryptocurrencies.
Coinbase’s research found that while 60% of users buy bitcoin as their first step in the cryptocurrency space, only 24% stick to it. Specifically, investors appear to be more willing to risk their funds on altcoins during bull runs. In 2017, when Bitcoin’s dominance in the crypto space dropped, Ethereum became the dominant asset o the platform with around 50% of the total trading volume.
Justin Mart, an executive at Coinbase, noted:
“This could be for a variety of reasons, but one is largely psychological. As people feel good about their initial crypto investments (into Bitcoin), they branch out to find other possible categorical winners (as evident in the 2017 bull run).”
During bear markets, however, investors turn to Bitcoin again as the “blue-chip” cryptocurrency. The report suggests BTC could be moving towards becoming digital gold.