Well it is true that anyone can fire up a new Shitcoin on a whim, but just because you can easily create a new currency doesn't guarantee it will have value or take market share from Bitcoin.

I think a reasonable analogy would be to ask if creating a new corporation and listing it on a stock exchange would hurt other publicly traded companies. To a certain degree, yes some investors may choose to buy your stock over another stock, but the reason they buy it is because they believe the company is providing value or will provide value in the future.

In the case of Cryptos, they are going to need to be innovative or provide a unique use case in order for people to value them in the long term. Short term we really have no way of knowing outside of pure speculation and we may not know if something has a long term purpose for years. ETH at this point is still pretty much 100% hype and promises. At least BTC has an 8 year history of being a rock solid, immutable store of value.

I would also add that if we had 10,000 alt-coins right now, it's doubtful the other 9000 would have much, if any MCap. There are simply not enough use cases and having 10,000 potential options is just spreading way too thin. Chances are that most of the wealth would remain in the top 100 with everything else just being excessively illiquid.