Bitcoin’s status stems from the fact that it was the first kid on the crypto block. Many cryptocurrencies that followed used Bitcoin’s blockchain as the base. When Bitcoin is compared to other cryptos, it is found that those other digital coins solve problems that Bitcoin did not expect, plan for, or consider worthy enough of solving. 

In spite of that, Bitcoin remains the most important and high-profile digital coin throughout the digital currency space. In this article, we will cover some of the reasons that make Bitcoin so valuable in spite of the advent of so many more digital currencies. 

Why Does Bitcoin Have Value?

It is Decentralized

Bitcoin does not have a startup lurking behind its code, trying to develop blockchain technology for a specific use, niche, or customer. The currency is decentralized, which means that its performance is not contingent on the performance of the startup. 

Instead, as a Bitcoin investor, what you want is to see the coin becoming a more common and important tool for transactions. In other words, Bitcoin investors do not want to see the coin become a business tool, as much as they want it to become a tool for conducting business. This is a higher-than-normal bar for adoption since it requires a greater mainstream need to prosper and grow. 

Bitcoin is not a sole decentralized currency. In fact, it has a number of currency forks that were developed to address any issues within the original coin. These forks have since gone on to become renowned currencies on their own. These forks, just like the original Bitcoin, are decentralized. In addition, several other decentralized currencies have also popped up in an attempt to solve issues that have not been addressed by Bitcoin. These currencies could reduce the mainstream appeal for Bitcoin, although that has not happened yet. 

It is the Leader of the Pack

Media reports covering the rise and fall of the crypto market are based on the performance of Bitcoin. You can see Bitcoin as the S&P 500 of the cryptocurrency market, which means that it will determine the overall market sentiment related to cryptos. Due to this status, Bitcoin attracts the most attention. Even if there is a small dip in the price of crypto, people will start speculating if this fall in price indicates the end of the crypto bubble. 

This attention leads to a greater number of Bitcoin trades, and this comes with its own set of positive and negative side-effects. As the crypto with the most number of transactions, the Bitcoin momentum will determine how your individual investments perform. As price increases, crypto investors will flock over to the market. However, if there is a dip in price, the price will drop deeper than it should, primarily due to the fear triggered by the initial drop in prices. These shifts in momentum cause a lot of roller-coaster rides that are hardly ever indicative of Bitcoin’s growth (or lack of it) as a digital currency. 

It Moves Every Tide

trading graph that that seeks to understand Why Does Bitcoin Have Value

Like we mentioned, when Bitcoin moves in a certain direction, it takes the entire crypto universe with it. Being the crypto bellwether, Bitcoin determines the performance of a lot of other currencies as well. So, when Bitcoin is doing well, investors are suddenly also interested in other coins like Ethereum or Litecoin. Similarly, when Bitcoin is struggling, so will the other coins in the crypto space. 

As an investor, you want to place your money on a cryptocurrency that will do well on its merits and will not depend on the performance of another digital coin. At the moment, Bitcoin is the only virtual currency that fits that bill. In fact, the lack of popular coins that do NOT move with Bitcoin is actually one of the biggest weaknesses of the crypto space. There are a few coins that move independently of Bitcoin; however, these coins are small and not very well-known and are unlikely to be able to survive over the long term. 

The Investing Community is Convinced

The investing community has shown a willingness to at least test its waters in the Bitcoin pool – something that cannot be said for most other currencies at the moment. 

A future markets has been created where investors can trade futures contracts, betting on whether Bitcoin will go up or down in the future. ETFs (Exchange Trade Funds) have also invested in Bitcoin in order to ride out the momentum, providing a buffer for returns. Goldman Sachs has initiated a Bitcoin-trading section. Numerous entities are seeking permission from the SEC to create the first-ever crypto index funds targeted towards retail investors – index funds that will be heavily tilted towards Bitcoin. 

Bitcoin is a currency that has been able to create all this momentum all on its own, which boosts the adoption rates and offers security, providing a floor for your investment. 

It is Synonymous with Crypto

It is true that every digital currency has a stake in the marketing and perception of cryptocurrencies – but, again, there is one currency that stands out from the rest. 

Bitcoin has an unparalleled fan-base and image, making it a fad all by itself. T-shirts, bumper stickers, paraphernalia, and even real gold coins have been developed around Bitcoin. In other words, Bitcoin now represents something far more significant than itself: it has become a symbol of decentralized currency; independence, freedom, and liberation from a centralized government; technical achievement; isolation; and a unique opportunity to amass wealth. 

This status symbol helps sell Bitcoin’s use and utility, thereby protecting the coin within the crypto universe. 

Final Word

To sum up, decentralization is an important feature of Bitcoin that allows it to distinguish itself from other popular digital coins in the crypto space. However, there are a number of other factors as well that have helped Bitcoin cling on to its crown despite the increasing number of rivals. Whether another currency manages to dethrone Bitcoin in the future is yet to be seen.