There are a LOT of cryptocurrencies out there. We’ve had Bitcoin, Litecoin, Dogecoin, Peercoin, Feathercoin, Zcash, BitShares, Ethereum, Nem, PIVX, Monero, and many more. What sets Bitcoin apart is that it’s the only currency that’s held up to the test of time. In other words, it’s the only currency that’s constantly increasing in value.
Cryptocurrencies like Bitcoin have been in the spotlight for a while now, but a lot of people still don’t exactly know what it is and how it works. If you’re new to the industry, here’s what you need to know: like traditional money, cryptocurrencies are digital money that can be used for online transactions. Unlike traditional money, they can only be created by users or companies that run computers all day and perform complex equations to find new blocks of data. Cryptocurrencies are also decentralized, which means that individual users don’t have to rely on banks or governments to manage their accounts and transactions.
A new product from cryptocurrency exchange Binance will soon allow traders to bet on whether Bitcoin will rise or fall on the cryptocurrency market, according to a statement released today. #Binance Futures launches open contracts in USDⓈ-M BTCDOM with up to 25x leverage. ➡️ https://t.co/RXkPj89lO0 pic.twitter.com/pmsDTo6v31 – Binance (@binance) June 17, 2021 The product, offered under the ticker BTCDOM, is a cryptocurrency price index that reflects bitcoin’s market dominance by comparing its assets to the top 20 cryptocurrencies on Binance in terms of market capitalization (excluding Stabelcoins). The BTCDOM index is a metric that traders can use to quickly get a sense of bitcoin’s value relative to the broader cryptocurrency market, Binance said in a statement. Bitcoin dominance is a measure of the market share of this asset relative to other cryptocurrencies. As the chart below shows, it accounted for a whopping 93% of the total cryptocurrency market in 2013, dropped to a low of 33% in January 2018, rose to over 69% in 2020, and is now down to 43%. (Note: This chart compares bitcoin to all other cryptocurrencies, while BTCDOM only compares to 20. Therefore, the numbers may differ). Image: CoinMarketCap.Dominance and use of bitcoin
BTCDOM will be an open-ended contract, a term that refers to a term product with no expiration date. There will be a tether margin (using USDT as collateral) and traders will have access to 25x leverage. According to Binance, the BTCDOM index provides insight into the market and can be used as a tool to speculate on the relative strength of bitcoin against other cryptocurrencies. Traders can thus make a macro bet on the crypto currency market if altcoins increase their market share relative to bitcoin (the index then loses value). Conversely, if altcoins lose market share to bitcoin, the index will rise and traders can take profits (or hedge their bets). However, the index is unlikely to alternate between rising and falling. Under certain circumstances, if bitcoin’s value falls but the rest of the cryptocurrency market falls at the same rate, bitcoin’s dominance will likely remain the same, Binance said.
Gaining an advantage in the crypto asset market
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