if alts were not in fact a distraction and were not contributing to a zero sum game, then all cryptocurrencies should be falling in lock step.
the fact that alts are falling disproportionately more indicates to me, at least, that alts are in fact a distraction and subtracting from Bitcoin in a zero sum game and are in the process of being flushed.
It's not easy to measure that fact without any accepted indexes, but using the indexes I've been calculating, over the last two weeks, alts are down 37-40%, whereas BTC is down about 20% (varies, depending on times of the day, but that's pretty close).
I'm not sure alts are going to be flushed. In the early twentieth century, there were, believe it or not, more than 1000 automobile manufacturers in the US. Of course, that was narrowed down to The Big Three with really just a couple of other important players over a 70-80 year period. My guess is that we'll see a similar winnowing down of alts.
Of course, with auto manufacturing, you've got immense overhead costs. You've got assets backing up debt. If a company isn't cutting it, liquidation is imminent. With cryptos, you can imagine these useless pieces of code floating around and still being listed on exchanges. There isn't quite as much urgency for a resolution. So it may NOT be the case that, say, Poloniex is going to end up trading only 5-7 alts.
But I'd strongly suspect that we will work towards an equilibrium where only a handful of alts matter, and it will be obvious which ones.
