Bitcoin is the oldest and most famous cryptocurrency, but there are thousands of other digital assets, called altcoins, that have emerged in recent years. While many altcoins have unique features and use cases, they often follow the price movements of bitcoin, meaning that when bitcoin’s price rises or falls, so do theirs. In this article, we’ll take a closer look at which altcoins follow bitcoin and why.
Ethereum
Ethereum is the second-largest cryptocurrency by market capitalization and is often considered the closest competitor to bitcoin. However, unlike bitcoin, Ethereum is more than just a digital currency; it’s a decentralized platform that enables developers to create and deploy decentralized applications (dApps) on its blockchain. Ethereum is also the native currency used to pay for transactions and smart contracts on the Ethereum network.
Ethereum’s price is closely linked to bitcoin as it is often used as a base currency for altcoin trading pairs on exchanges. Additionally, Ethereum’s price is influenced by the overall sentiment in the crypto market, which is largely driven by bitcoin’s price movements.
Litecoin
Litecoin was created in 2011 as a “lite” version of bitcoin, designed to offer faster transaction times and lower fees. Litecoin’s blockchain is similar to bitcoin’s, but it uses a different mining algorithm, which makes it easier to mine than bitcoin. Litecoin’s price follows bitcoin’s closely as it is often used as a “testnet” for new bitcoin technologies and is one of the most popular altcoins for trading pairs with bitcoin.
Bitcoin Cash
Bitcoin Cash is a fork of bitcoin that was created in 2017 to address some of the scalability issues of the original bitcoin blockchain. Bitcoin Cash has a larger block size limit than bitcoin, allowing it to process more transactions per second. Bitcoin Cash’s price is heavily influenced by bitcoin’s price as it is often used as a hedge against bitcoin’s volatility.
Ripple
Ripple is a digital payment protocol that was created to enable fast and low-cost international money transfers. Ripple’s XRP token is used to facilitate transactions on the Ripple network and is often used by banks and financial institutions to settle cross-border payments. Ripple’s price is not as closely tied to bitcoin as some other altcoins, but it still tends to follow bitcoin’s price movements to some extent.
Dogecoin
Dogecoin is a meme-inspired cryptocurrency that was created in 2013 as a joke. However, despite its humorous origins, Dogecoin has gained a significant following and has been used to raise money for various charitable causes. Dogecoin’s price is often influenced by the overall sentiment in the crypto market, including bitcoin’s price movements.
Conclusion
While there are thousands of altcoins available, only a handful of them are closely tied to bitcoin’s price movements. Ethereum, Litecoin, Bitcoin Cash, Ripple, and Dogecoin are some of the most popular altcoins that follow bitcoin. These coins are often used as trading pairs with bitcoin and are influenced by the overall sentiment in the crypto market. As the crypto market continues to evolve, it’s likely that new altcoins will emerge that are also closely tied to bitcoin’s price movements.