Popular strategist Benjamin Cowen says that a reallocation of funds is occurring in the crypto asset space with Bitcoin (BTC) emerging as the major beneficiary.
Cowen tells his 783,000 YouTube subscribers that Bitcoin dominance is rising as people dump altcoins in favor of the “blue chip” crypto asset.
According to Cowen, even Ethereum (ETH) also loses value relative to Bitcoin as people reallocate to the king crypto.
“The altcoin market is highly illiquid and people are flocking to the relative safety of the blue chips that sends the dominance of Bitcoin higher…
The altcoin market bleeds to ETH and Bitcoin. Theoretically, ETH bleeds to Bitcoin as well. The dominance goes up and it sends you the Bitcoin/US dollar valuation higher at the expense of the altcoin market liquidity.
At some point, the altcoin market liquidity can no longer sustain the Bitcoin price… as Bitcoin rolls over, the altcoin market gets even more wrecked.”
The popular crypto analyst says that Bitcoin is more appealing currently than altcoins due to the prevailing macroeconomic environment.
“We essentially have this dynamic where this liquidity from the lower liquidity assets are seeking out the relative safety of the higher liquid assets, right.
Because in times of economic uncertainty, which I guess times are always uncertain. But in times like this where there’s there’s plenty of macro stuff to talk about: inverted yield curve, high inflation, a more hawkish Federal Reserve than we’ve seen in 40 years, people are going to seek out the relative safety of the blue chips within that asset class…
People that are not in crypto with sort of scoff at the idea of calling Bitcoin a blue chip but it’s all about within the asset class that you’re interested in what is the blue chip considered, right? And in crypto, it’s Bitcoin.”
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Source: https://dailyhodl.com/2023/05/26/traders-are-flocking-to-blue-chip-bitcoin-and-fleeing-altcoins-says-analyst-benjamin-cowen-heres-why/