Why Bitcoin Soars While Ethereum and Litecoin Fall

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In recent weeks, Bitcoin has once again entered a phase of explosive growth. Data from major Chinese exchanges like OKCoin and Huobi show that since August 2, Bitcoin surged for 14 out of 15 consecutive trading days, gaining nearly 10,000 yuan and peaking around 29,000 yuan. Yet, curiously, while Bitcoin hits new highs, other top cryptocurrencies like Ethereum (ETH), Ripple (XRP), and Litecoin (LTC) have failed to break past resistance levels—some even declining.

Historically, digital assets tend to move in tandem. Though competition exists among blockchains, broad market trends usually affect all major coins similarly. This divergence raises questions: Why is Bitcoin rising alone? What’s driving this unusual momentum? And is it sustainable?

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The Market Divergence: Bitcoin Dominance on the Rise

To understand the anomaly, let’s examine market capitalization data. According to CoinMarketCap, as of August 14, 2017, the total crypto market cap stood at approximately $140 billion. Bitcoin alone accounted for $71.8 billion—over 51% of the entire market.

Compare that to June 28, 2017: total market cap was $106.1 billion, with Bitcoin at $42.3 billion (just under 40%). In just six weeks, the overall market grew by $33.9 billion. Of that, Bitcoin contributed **$29.5 billion in value growth**.

Even more telling: when factoring in Bitcoin Cash (BCH), which launched on August 1 with a near-$5 billion market cap shortly after, the rest of the crypto market—excluding Bitcoin and BCH—actually contracted. During a period when Bitcoin’s value rose nearly 70%, alternative coins (altcoins) stagnated or dropped.

This isn’t just outperformance—it’s a market consolidation around Bitcoin, signaling a shift in investor behavior.

Two Key Drivers Behind Bitcoin’s Rally

While broader blockchain adoption benefits the entire ecosystem, Bitcoin’s current rally cannot be explained by general industry trends alone. Instead, two specific catalysts have driven its unique momentum:

1. SegWit Activation: A Technical Breakthrough

The successful locking-in of the Segregated Witness (SegWit) protocol was a pivotal moment for Bitcoin. For years, Bitcoin faced criticism for slow transaction speeds and limited scalability compared to newer platforms like Ethereum.

SegWit addressed this by changing how transaction data is stored—freeing up block space and enabling future upgrades like the Lightning Network. This technical milestone restored confidence in Bitcoin’s long-term viability.

Even rumors of SegWit deployment sparked rallies earlier in May 2017, when Bitcoin rose for nine out of ten days—twice within a month. The actual activation in August turned expectation into reality, triggering another wave of bullish sentiment.

2. ICO Boom Fuels Demand for Cryptocurrencies

Initial Coin Offerings (ICOs) exploded in popularity throughout 2017. According to Coindesk’s ICO tracker:

Most ICOs accepted Bitcoin and Ethereum as payment. As investors scrambled to participate, demand for both assets surged. However, while Bitcoin responded strongly, Ethereum remained flat—trading around 2,000 CNY despite earlier highs near 3,000 CNY.

This suggests that while ICOs boosted demand broadly, Bitcoin absorbed most of the capital inflow, possibly due to its perceived stability and liquidity.

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But Is the Foundation Solid?

Despite these drivers, concerns remain about the sustainability of Bitcoin’s rise.

The SegWit deployment, while technically positive, has intensified internal conflict within the Bitcoin community. Miners supported SegWit under the New York Agreement, which promised a follow-up 2MB block size increase (SegWit2x). However, core developers behind Bitcoin Core oppose hard forks and plan to release Bitcoin Core 0.15.0, which will not support SegWit2x nodes.

This creates a dangerous split: if miners push forward with larger blocks while core nodes reject them, a chain fork becomes inevitable. Historical precedent (like the Bitcoin Cash split) shows such events can lead to volatility, confusion, and loss of trust.

SegWit2x developers announced plans for the 2MB upgrade in November 2017—about 90 days post-SegWit activation—with over 90% of mining power reportedly backing it. Yet without consensus, this could fracture the network again.

So why celebrate SegWit if it risks another split? Why does the price keep climbing?

The Real Force: Speculation and Bubble Dynamics

Ultimately, fundamental factors alone don’t justify the scale of Bitcoin’s surge. The ICO boom added demand—but only in the hundreds of millions monthly, not enough to justify billions in price growth. Ethereum’s stagnation further weakens the argument for broad-based crypto strength.

That leaves speculative psychology as the dominant force.

Many investors operate under the belief that "Bitcoin will eventually be worth millions—so buy now and hold." While visionary, this mindset ignores valuation discipline. As Warren Buffett famously advises: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Bitcoin may be revolutionary—but timing and price matter. Even believers can falter when volatility tests their resolve.

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Frequently Asked Questions (FAQ)

Q: Why is Bitcoin rising while other cryptocurrencies fall?
A: Bitcoin’s recent gains are driven by technical upgrades (like SegWit) and strong investor sentiment, while altcoins face weaker demand and reduced market interest during periods of high Bitcoin dominance.

Q: Does SegWit solve Bitcoin’s scalability issues?
A: Partially. SegWit increases effective block capacity and enables second-layer solutions like the Lightning Network, but full scalability requires further adoption and development.

Q: Could another Bitcoin fork happen in late 2017?
A: Yes. The proposed SegWit2x upgrade aimed for November 2017 could trigger a hard fork if consensus isn’t reached between miners and core developers.

Q: Are altcoins like Ethereum and Litecoin dead?
A: No. While currently underperforming, both serve unique roles—Ethereum in smart contracts and decentralized apps, Litecoin in fast payments—and could rebound with renewed market cycles.

Q: Is Bitcoin in a bubble?
A: Elements of speculation are present. Rapid price increases without proportional usage growth often signal overheated markets. Long-term value depends on adoption beyond trading.

Q: Should I sell altcoins to buy Bitcoin?
A: That depends on your investment strategy. Bitcoin offers stability and dominance; altcoins offer higher risk and potential reward. Diversification and timing are key.

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Final Thoughts

Bitcoin’s 2017 rally reflects more than technological progress—it reveals the powerful influence of narrative, expectation, and herd behavior in emerging markets. While SegWit and ICO demand provided initial sparks, speculative momentum has become the primary fuel.

For investors, the lesson is clear: innovation matters, but so does valuation. The crypto market rewards patience and discipline—not just belief.

As the ecosystem evolves, watch not only price charts but also on-chain activity, developer engagement, and regulatory shifts. These indicators offer deeper insight than headlines or hype.

Whether you're holding Bitcoin, watching Ethereum, or assessing Litecoin’s role, staying informed—not just optimistic—is your best strategy in this rapidly changing landscape.