The crypto community’s collective understanding of the space is improving rapidly. Content creators, influencers and YouTubers are also good at converting complex jargon into easy-to-digest information. The community recognizes that correctly classifying cryptocurrencies increases the chances of finding good new projects early. For example, telling someone that a revolutionary NFT is just an altcoin will influence their first impression and possibly give the NFT less worth.
Classifying cryptocurrencies helps with comparing them. To effectively compare cryptocurrencies, you must know what they are and whether others are doing the same thing. That’s why you can’t compare Dash to something like ADA — one is a payment cryptocurrency, while the other is the utility token of a proof-of-stake smart contract platform.
Another argument for the collapse of the classification of Bitcoin vs. altcoins is the varying correlations between BTC and other coins. While the correlation is high within some pairs, others demonstrate weaker dependence on each other. For instance, ADA and XRP show a lower correlation with other digital assets, not to mention that stablecoins such as Tether (USDT) show negative correlations.