Benjamin Cowen shared that even if the prices of altcoins rise, it is risky because he thinks that the Bitcoin dominance index (BTC.D) will rise regardless of which direction BTC goes.
The BTC.D chart tracks how much of the total value of the cryptocurrency market belongs to Bitcoin. A rising BTC dominance indicates that Bitcoin is rising faster than other cryptocurrencies, or altcoins are losing value as the leading cryptocurrency rises. In a bearish scenario, rising Bitcoin dominance indicates altcoins are falling faster than Bitcoin. Cowen clarified the issue of Bitcoin dominance with the following words:
“Whether BTC busts or not, BTC dominance should rise either way. That’s our thesis: Bitcoin’s dominance should rise regardless of whether Bitcoin rises or falls. Since we started in 2022, I’ve said altcoins aren’t worth the risk compared to Bitcoin. I don’t think they’re worth the risk yet, but that doesn’t mean that some US dollar pairs haven’t bottomed out.”
Not only is the dominance level of BTC locked to rise, Cowen also added that Bitcoin is a good choice for investors as it will attract less attention from regulators.
With all this, Cowen added that altcoins could start to rise in the beginning of 2024 or at the end of this year:
“Bitcoin remains the better choice in terms of risk-adjusted returns, so in terms of risk you take, Bitcoin remains the better choice at the moment. Why would that be for a fundamental reason? I think regulations. Bitcoin is the kind that altcoin market has It won’t have regulatory scrutiny, and I think 2023 will probably be a tough year for altcoins in the context of these regulations. When we get to 2024, and maybe even late 2023, I’ll take off my maximalist hat and probably return to the altcoin market.”