No longer digital gold? Bitcoin's slump steeper than other smaller cryptos

The search for the "other Bitcoin" is hurting the real thing.

Bitcoin, the largest cryptocurrency, has sputtered out the gate this year and fell as much as 20 per cent to about $11,200 Tuesday, the lowest since December. But while regulatory concerns have turned most major crypto markets into a sea of red this month, smaller cryptos have rallied.

Bitcoin’s underperformance may be due in part to doubt that the currency can continue delivering the same 1,400 per cent returns it did last year, spurring traders to look for smaller digital assets that promise more upside.

That caused Bitcoin’s share of the cryptocurrency market to drop to a record low of 32 per cent last week from over 90 per cent a year ago. And while Ethereum’s Ether, Bitcoin Cash and Ripple’s XRP vie to dethrone Bitcoin as the biggest crypto by market capitalization, the combined value of assorted smaller digital assets is overtaking the larger cryptocurrencies’, except for Bitcoin, for the first time.

The "Others" category on CoinMarketCap is now 22 per cent of the market, just about 10 percentage points from Bitcoin.

After previous generalized sell-offs, Bitcoin has rebounded as investors go back to the original decentralized currency, considered to be the "digital gold" in the space. There is no sign of that this time around.