On value dilution

[kryptqnick]

it is also claimed that altcoins are effectively making Bitcoin supply unlimited, i.e. without them Bitcoin price would be higher. In this manner, they are taking value from Bitcoin as if its supply were in fact constantly expanding. Indeed, not all altcoins are born equal and it is not likely either that a multitude of shitcoins out there can make a serious dent in Bitcoin's value, if at all (as most of them are abandoned by now anyway). But there are other, more precious pebbles on that beach

Major altcoins such as Litecoin, Ethereum, BCash, maybe, a couple others are not something to be sneezed at and then discarded as completely inconsequential. It could be said that they are making crypto better known to the wider public and thus contributing to Bitcoin's value as well, so things are more complicated than they first appear to be.

I found an answer to this question for myself by looking at bitcoin dominance on the market and prices. There is no strict correlation between bitcoin and altcoins. However, if we analyse history with the help of coinmarketcap's historical snapshots, a few things become clear:
1. Bitcoin's dominance is falling as the market grows.
2. Meanwhile, the prices of bitcoin as well as other coins are growing.
3. During the bullish market, bitcoin and altcoins are doing great in terms of prices, and bitcoin's dominance is decreasing.
4. During the bearish market, bitcoin and altcoins are losing value, and bitcoin's dominance is increasing.
With that being said, when bitcoin goes up, other coins follow the trend. When the market is in very good condition, some coins go up, others might go down, but the prices generally don't follow those of other coins apart from the general upward trend. When bitcoin is going down, other coins generally tend to follow the trend and lose more. So, when things are bad, they are bad for bitcoin and even worse for altcoins. Thus, IMO strong altcoins help out bitcoin and vice versa, the market's growth is good for the king as well as for the kingdom, so to speak.

[deisik]

it is also claimed that altcoins are effectively making Bitcoin supply unlimited, i.e. without them Bitcoin price would be higher. In this manner, they are taking value from Bitcoin as if its supply were in fact constantly expanding. Indeed, not all altcoins are born equal and it is not likely either that a multitude of shitcoins out there can make a serious dent in Bitcoin's value, if at all (as most of them are abandoned by now anyway). But there are other, more precious pebbles on that beach

Major altcoins such as Litecoin, Ethereum, BCash, maybe, a couple others are not something to be sneezed at and then discarded as completely inconsequential. It could be said that they are making crypto better known to the wider public and thus contributing to Bitcoin's value as well, so things are more complicated than they first appear to be.

I found an answer to this question for myself by looking at bitcoin dominance on the market and prices. There is no strict correlation between bitcoin and altcoins. However, if we analyse history with the help of coinmarketcap's historical snapshots, a few things become clear:
1. Bitcoin's dominance is falling as the market grows.
2. Meanwhile, the prices of bitcoin as well as other coins are growing.
3. During the bullish market, bitcoin and altcoins are doing great in terms of prices, and bitcoin's dominance is decreasing.
4. During the bearish market, bitcoin and altcoins are losing value, and bitcoin's dominance is increasing.
With that being said, when bitcoin goes up, other coins follow the trend. When the market is in very good condition, some coins go up, others might go down, but the prices generally don't follow those of other coins apart from the general upward trend. When bitcoin is going down, other coins generally tend to follow the trend and lose more. So, when things are bad, they are bad for bitcoin and even worse for altcoins. Thus, IMO strong altcoins help out bitcoin and vice versa, the market's growth is good for the king as well as for the kingdom, so to speak.

So what's the bottom line?

Do altcoins add to Bitcoin value or take from it (price-wise, before all)? To make things easier to understand, would Bitcoin be priced higher if there were no altcoins (or just less altcoins)? Further, it seems to be universally accepted that Bitcoin is the primary driver behind the market growth (as well as downfall, for that matter). In other words, where Bitcoin goes, there altcoins go as well (on average)

[traderethereum]

I don't think bitcoin will be better without altcoin because as far as I know, the altcoin exists in the cryptocurrency to help the user to earn bitcoin by trading. Altcoin like ethereum makes people know about cryptocurrency because they read about many projects from 2017 ago and it makes them know that in the higher position, there is bitcoin that leads the cryptocurrency market.

I realize that besides of Ethereum and the other big coins or in a good position at CMC, many altcoins still competing with each other to raise a better place too. So altcoin doesn't have any chance to eat away at Bitcoin's value because altcoin value will not reach bitcoin value. But I don't know with the future because this technology still developed and maybe in the future, we will see another technology that can compete with blockchain technology or with the other.

[Ucy]

I think Altcoins are filling the vacuum left by Bitcoin. More like what Andriod is to Apple. There wouldn't have been need for altcoins if their features are available on Bitcoin. It would be impossible for Bitcoin to solve every single problem plaguing t cryptocurrency. New Idea shouldl always be welcomed

[deisik]

I think Altcoins are filling the vacuum left by Bitcoin. More like what Andriod is to Apple. There wouldn't have been need for altcoins if their features are available on Bitcoin. It would be impossible for Bitcoin to solve every single problem plaguing t cryptocurrency. New Idea shouldl always be welcomed

As much as I myself want it to be the case here, it is nowhere near that

The only void that altcoins can fill is lack of volatility in Bitcoin if it can be said so, comparatively speaking. Indeed, Bitcoin is volatile as fuck but altcoins take volatility to the next level of extremity. In simple terms, they are more speculative than Bitcoin, and this is their only real advantage

Okay, I know that there are features that Bitcoin lacks (for example, smart contracts). But how much of Bitcoin price (or lack thereof) can be attributed to them? I don't think that much. In this way, your whole assumption seems to be based on non-existent premises (well, let's call them far fetched) and is therefore invalid overall

[wuvdoll]

I guess there is a sweet spot in between. I mean bitcoin without altcoins wouldn't have gotten this much attention to begin with, so bitcoin definitely needs altcoins to exists, however it is also true that some money that could go to bitcoin is also diluted into altcoins which makes bitcoin not go higher with that money.

Now, if there was no altcoins that would mean bitcoin would get that money instead but at the same time if there was no altcoin bitcoin wouldn't get attention from some people who like altcoins more as well. That is why I think there is a fine line of "too many altcoins" and also "not enough altcoins", ethereum and litecoin and many coins like that are fine and should exists and helps people out but there are over 2000 coins which we do not use or need, they are useless to begin with and should be gone.

I believe if we had like 500 coins at max, that would be fine and help bitcoin, anything over is just pure waste of time and effort and money.

[deisik]

I guess there is a sweet spot in between. I mean bitcoin without altcoins wouldn't have gotten this much attention to begin with, so bitcoin definitely needs altcoins to exists, however it is also true that some money that could go to bitcoin is also diluted into altcoins which makes bitcoin not go higher with that money

This point is debatable

It can be said that it is altcoins which get publicity through Bitcoin. After all, if Bitcoin didn't appear, altcoins would not be heard of either (well, there could be some other form of cryptomoney but it is irrelevant). In this way, it is altcoins which are profiting from the Bitcoin popularity and not so much the other way around. So even in this specific case altcoins take more than give back

Now, if there was no altcoins that would mean bitcoin would get that money instead but at the same time if there was no altcoin bitcoin wouldn't get attention from some people who like altcoins more as well

People learn about crypto via Bitcoin, not altcoins, so the net result should be pretty clear

[BitHodler]

I believe if we had like 500 coins at max, that would be fine and help bitcoin, anything over is just pure waste of time and effort and money.

People mostly assume that there are like 2000 altcoins in existence based on what Coinmarketcap indicates, but that's not even half of what exits, and it might not even be a 10th in the grand scheme of things.

Binance once stated that they received listing applications of over 5000 projects, so imagine how many of these they had to reject and for that reason don't make it to Coinmarketcap.

That's also one of the reasons Bitcoin's market cap dominance isn't a helpful metric. In the coming years there will be so many coins and tokens added to Coinmarketcap that Bitcoin's market cap dominance will tank below 25%.

[deisik]

That's also one of the reasons Bitcoin's market cap dominance isn't a helpful metric. In the coming years there will be so many coins and tokens added to Coinmarketcap that Bitcoin's market cap dominance will tank below 25%

That's why we need another metric

Which would be more reliable and accurate. Personally, I go for trading volumes, though they are not without their own shortcomings either because much of the trading volume is outright fake. On the other hand, I don't think that all 5000+ altcoins combined would inaccurately "devalue" Bitcoin in market cap terms anyway, especially if most of them are left for good and dead, i.e. their orderbooks (whenever they might have been listed) are empty at the Bid side (which means they are totally worthless)

[Theb]

On the truest sense the answer is yes because if we are talking about Bitcoin's market share in the crypto market we are seeing that it is on a decline. But if you think that Bitcoin can go to it ATH as the one and only cryptocurrency market than think again. Without altcoins in the market I doubt that BTC will even be as popular in the market compared to what we are seeing now. Bitcoin and altcoins have a symbiotic relationship on the sense how Bitcoin's movement can influence the market and how altcoins made the market even more popular to its investors.

[deisik]

Without altcoins in the market I doubt that BTC will even be as popular in the market compared to what we are seeing now. Bitcoin and altcoins have a symbiotic relationship on the sense how Bitcoin's movement can influence the market and how altcoins made the market even more popular to its investors

Technically, I agree with this (to a degree)

Altcoins pick up where Bitcoin leaves off. For example, many people after a while become no longer satisfied with the money they make through Bitcoin's volatility (as they say, one leg of mutton helps down another), while altcoins look promising in this regard (whether they actually live up to these promises is another question)

However, I don't see how it disproves my point as people move from Bitcoin to altcoins looking for more profits, and that's exactly what I'm talking about, i.e. without altcoins people would be trading Bitcoin only (note that I don't say whether it would be good or bad)

[mu_enrico]

I think it depends on the BTC value proposition. If altcoins have the same value proposition, i.e., as a P2P cash system, then these altcoins would dilute the BTC value. In other words, altcoins such as LTC, BCH, XMR, etc., would take away some BTC market share. However, it depends on your judgment whether some properties like more privacy, faster tx, etc., are offering different (significant) value proposition or not.

For the Dapps platform like EOS, ETH, ADA, etc., they are not playing in the same market as BTC.

[deisik]

I think it depends on the BTC value proposition. If altcoins have the same value proposition, i.e., as a P2P cash system, then these altcoins would dilute the BTC value. In other words, altcoins such as LTC, BCH, XMR, etc., would take away some BTC market share. However, it depends on your judgment whether some properties like more privacy, faster tx, etc., are offering different (significant) value proposition or not

All cryptocurrencies have basically the same value proposition

If we cut all the empty verbiage, most of their value comes through speculation. More privacy, faster and cheaper transactions, etc are important only as long as they can be used for heating up the speculation and adding more fuel to the hype. For example, ZCash was created as a Bitcoin copycat with more privacy added, and how many people were actually using it with this purpose in mind? I don't think that many. After it got kicked from regulated exchanges (for being too private), its price crashed. So much for the longed for and dreamed of privacy, huh

For the Dapps platform like EOS, ETH, ADA, etc., they are not playing in the same market as BTC

I'd rather say it is more like some part of them is not playing in the same market as Bitcoin (probably, even the minor part) but they are still traded on exchanges. For example, I see EOS and Ethereum being listed at Bitinex (in fact, I'm shorting the latter right now), so it is not like they don't meddle with Bitcoin on this front as they definitely do

[kryptqnick]

So what's the bottom line?

Do altcoins add to Bitcoin value or take from it (price-wise, before all)? To make things easier to understand, would Bitcoin be priced higher if there were no altcoins (or just less altcoins)? Further, it seems to be universally accepted that Bitcoin is the primary driver behind the market growth (as well as downfall, for that matter). In other words, where Bitcoin goes, there altcoins go as well (on average)

I think that if there were no altcoins, less people would know about crypto and be interested in it at all. So I'd say that altcoins increase the value of Bitcoin. In the bearish market, bitcoin indeed seems to set the standard of the price dynamics for other coins (just look how similar the weekly charts of the main cryptocurrencies are).
But when the market is bullish, yeah, the top coins are mainly going up, but their price patterns are not similar to one another, because bitcoin does not have such a strong influence anymore. Take a look at these charts, for instance:

[LUCKMCFLY]

I think Bitcoin is the only currency that has structure, that is, you can identify the phases through which it has passed, being accumulation, trend and distribution, the Altcoins have no life of their own, they all depend directly or indirectly on Bitcoin, so much so that its graphs are very similar to bitcoin, especially the ones you talk about, however, the bitcoin when prices drop in some exchanges some coins go up, up to 30%, this is simple, they are the ones that survive thanks to Pump and Dump ... but altcoins bleed when bitcoin goes down, it's law.

[deisik]

So what's the bottom line?

Do altcoins add to Bitcoin value or take from it (price-wise, before all)? To make things easier to understand, would Bitcoin be priced higher if there were no altcoins (or just less altcoins)? Further, it seems to be universally accepted that Bitcoin is the primary driver behind the market growth (as well as downfall, for that matter). In other words, where Bitcoin goes, there altcoins go as well (on average)

I think that if there were no altcoins, less people would know about crypto and be interested in it at all. So I'd say that altcoins increase the value of Bitcoin. In the bearish market, bitcoin indeed seems to set the standard of the price dynamics for other coins (just look how similar the weekly charts of the main cryptocurrencies are).
But when the market is bullish, yeah, the top coins are mainly going up, but their price patterns are not similar to one another, because bitcoin does not have such a strong influence anymore. Take a look at these charts, for instance

I think there's not a lot of difference really

Indeed, if you calculate two different correlation coefficients, i.e. one for the downward movements and the other for the upward ones, they may in fact be somewhat different. But I don't really expect them to be too different to draw a conclusion like the one you arrived at (like "bitcoin does not have such a strong influence anymore")

In other words, if you just evaluated the upward correlation (without first considering or taking a look at the other metric), you would have to conclude that the price action between Bitcoin on the one side and altcoins on the other is still highly correlated. If anyone wants to make direct assessments, you are welcome

[Betwrong]

~, i.e. without altcoins people would be trading Bitcoin only (note that I don't say whether it would be good or bad)

Or, another option, they would pull out of crypto completely in the case of being disappointed with the gains they could make with trading BTC.

I think, you are partially right that Bitcoin price could be higher if there were no altcoins. But only partially because with all that buzz new projects generate, it can be true that we are getting more adopters of crypto in general, who then switch to BTC seeing that their projects fail. So, this sword cuts both ways, as they say. We can't state with certainty neither that altcoins are taking value from Bitcoin, nor that Bitcoin is benefiting from them.

[deisik]

I think, you are partially right that Bitcoin price could be higher if there were no altcoins. But only partially because with all that buzz new projects generate, it can be true that we are getting more adopters of crypto in general, who then switch to BTC seeing that their projects fail. So, this sword cuts both ways, as they say. We can't state with certainty neither that altcoins are taking value from Bitcoin, nor that Bitcoin is benefiting from them

I'm not sure how I can be partially right here

Really, if Bitcoin price would be higher without altcoins, then I would be just right (read, 100% right) since this is what my point essentially boils down to. In this case it would be legit to say that altcoins are in fact diluting Bitcoin's value as that is the net effect of their existence. It doesn't matter that while taking from Bitcoin they are also adding to it something as what they take exceeds what they give back

[webtricks]

I don't think presence of other cryptocurrencies can impact the price of Bitcoin significantly. Any commodity can significantly effect the price of other commodity only if they are substitute to each other. In the absence of substitution effect, what you saying isn't possible.
Now coming to captial market: the substitution effect is not present in capital market. For example: if Gold prices increases, it doesn't mean investors will right away sell their equities and invest in Gold because both markets are independent. Same applies to crypto market too. All coins are generally existing complementary to each other and the fact that altcoins exist doesn't decrease the demand for bitcoin rather increase it since direct market is not available for most of the coins and one has to buy btc in order to invest in other coins.

[deisik]

I don't think presence of other cryptocurrencies can impact the price of Bitcoin significantly. Any commodity can significantly effect the price of other commodity only if they are substitute to each other. In the absence of substitution effect, what you saying isn't possible

In fact, that remains to be seen

But your premises themselves are pretty much wrong on their own. All cryptocurrencies are mostly used for the same purpose which is earning profits via speculation. In this manner they are all very good substitutes for each other. And it is not about that only. For example, you can use Bitcoin to hedge against altcoins volatility. In this case, you can't technically say that Bitcoin is a substitute for altcoins, but they are still used together (read, you are incorrect even if your premises had some ground)