I think people involved in cryptos can definitely see the advantages of many of the altcoins for obvious reasons but the masses who are just learning about cryptos only see Bitcoin and it's monetary value and nothing else. Once people become more familiar with the options, i think you're right people will see the potential and invest more in the alternatives.
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It's already starting. Just a few months ago I barely looked at Ripple as a serious contender in my portfolio. Now its my top daytrading earner. The volume of altcoins increase is telling the tale.