New Report Shows That Increased Altcoin Supply May Decrease Bitcoin’s Value

A new report is viral and trending in the latest crypto news. Based on research conducted by the Federal Reserve Bank of St. Louis and published on January 11, the report focuses on Bitcoin and cites two unique perspectives.

First of them is the Bitcoin bulls’ belief that the capped supply and increased demand will also increase Bitcoin’s price. Second of them is the supply of altcoins which may bring the Bitcoin’s price closer to zero.

“We think the future price path is more likely to remain bounded between these two extremes,” the analysts noted in their research.

As the research also shows, the USD price of BTC will also depend on its exchange rate that is relative to altcoins, explaining that the bulls expect Bitcoin to appreciate relative to altcoins or at least keep its market capital relative to the global crypto market.

The chart that the researchers created also suggests that the increasing supply of altcoin is what keeps Bitcoin’s price – as well as the entire market- depressed.

“While Bitcoin’s price is not likely to fall to zero, the prospect of a flood of Altcoin competing with Bitcoin in the wealth portfolios of investors is likely to place significant downward pressure on the purchasing power of all cryptocurrencies, including Bitcoin.”

This also proves that the researchers think that Bitcoin has a fundamental value that will prevent its price from falling to zero, driven by the demand for its permissionless access and decentralized database.