By market capitalization, bitcoin is by far the largest digital currency. That heft does add some functionality and increases bitcoin’s allure among professional crypto traders.
One of the biggest problems facing the cryptocurrency space is that, even with bitcoin’s prominence, no digital currencies can be deemed “widely accepted.”
“If you want to own the asset that you can actually use today and that people are functionally using, it’s bitcoin,” Bart Smith, head of digital asset at trading giant Susquehanna International Group, said in an interview with CNBC.
What’s In Store for Bitcoin
As of 11:30am Eastern on Thursday, bitcoin was trading around $6,189 with a market value of $106 billion.
Bitcoin has been in a tailspin since early May and some traders believe the digital currency needs to make significant gains before market participants turn bullish. By some estimates, bitcoin would need to jump 30% to legitimize any rallies from current levels. A move of 20% typically confirms a new bull market. Some traders are concerned that bitcoin needs to fall significantly from current levels just to establish a legitimate bottom.
“Bitcoin, the largest cryptocurrency by market cap, has been just one of many digital coins in the crypto universe that has been under increased scrutiny in recent months as regulators try to determine how cryptocurrency should be used,” according to CNBC.
Related: Bitcoin Is Going To $25,000 By Year End
While some market observers contest bitcoin’s status as a store of value, there is no denying it has some practical uses, including quickly transferring money, a trait that gives it some advantages.
“But the fact that bitcoin has established use cases is what gives it the competitive advantage over other cryptocurrencies, Smith said,” reports CNBC.
Issues such as scalability must also be resolved before cryptos gain wider acceptance. Additionally, regulatory hurdles remain, including central banks in some countries outright banning transactions denominated in cryptocurrencies.
For more information on the cryptocurrency market, visit our Bitcoin category.