Coinbase reveals what its users do during BTC price surges

on May 15, 2020
Updated: Feb 15, 2024
  • Coinbase, recently released a new blog post about the crypto market.
  • It focused on the customers' behavior during the BTC price movement, stating that many shift to altcoins.
  • Bitcoin is still the preferred coin, but many tend to chase the potential to earn wherever they can find it.

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Coinbase exchange recently spoke about how its users tend to behave during Bitcoin price rallies. Interestingly enough, the exchange shared that the users do not usually stick to Bitcoin. Instead, they often shift towards altcoins, presumably with expectations of their own prices following that of Bitcoin.

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Why are investors moving towards altcoins?

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The exchange released its findings in a blog post, published on May 13th. It noted that around 60% of its users tend to start by buying Bitcoin. However, once the trend starts becoming more bullish, only around 24% of traders tend to stick to buying and holding BTC.

As soon as the trend starts influencing the prices of other cryptos, most investors usually start shifting toward them.

This might not be a surprise, given how volatile Bitcoin price actually is. The coin has demonstrated its ability to go up and down by several percent per day. Sometimes, it even makes huge leaps within minutes, and it rarely gives a warning of what it might do next.

However, in truth, the altcoin market is not much better. Coins with small market cap often spike up or down with any large buy or sell order, and are easy to manipulate. This movement then attracts traders who wish to make a quick profit.

Bitcoin is still the preferred coin

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This behavior tends to repeat whenever the Bitcoin price starts to grow. Investors first make a profit off of their BTC investment, and then cash out and buy Litecoin, BAT, or LINK on other exchanges.

The blog post claims that “On average, Coinbase customers trade non-BTC assets at a ~3% higher rate than their relative market caps would suggest.” However, it also states that “Bitcoin is king, and likely to remain king for a long time. But it is also paving the way for a thousand flowers to bloom.”

In other words, while Bitcoin continues to dominate, it also allows for other altcoins to bloom when its price starts to fall. Still, its inherent features, such as security and decentralization, are securing its position as the largest and most popular digital coin.


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