As for cryptocurrencies, Bitcoin still dominates the market. Almost half of the total crypto market share belongs to the number 1 cryptocurrency. Although Bitcoin is still at the top, the lead with which Bitcoin dominates the market has continued to decrease. Altcoins are taking more and more market share. Their increasing value leads to more investors investing money in them. They take money that they would otherwise have invested in BTC to invest it in altcoins. With this you take away Bitcoin market share and give it to altcoins.
The fact that altcoins are gaining more market share is due to the increasing demand for these alternative cryptocurrencies. This is because the price of the digital asset has risen so much in recent years that it seems too expensive to invest in it. Coins like Ethereum have captured a larger share of the market. It is currently close to 20%, but it has already reached almost 30%.
How Market Dominance Affects Cryptocurrencies
The market dominance of the various cryptocurrencies is calculated based on their market capitalization. Market dominance is actually about the value of the individual coin. Bitcoin currently holds the highest market capitalization of all cryptocurrencies. This puts it ahead of all other cryptocurrencies. For this reason, its market dominance is high – at present it is 44.5%.
Altcoins have approached this figure since the last bull run of 2017-2018. BTC’s market dominance has dropped from over 95% to 35%, hitting its lowest point. This is largely due to the fact that Ethereum is gaining more and more market share.
The decline in BTC dominance led to what is affectionately referred to in the market as the “altcoin season.” The prices of altcoins have skyrocketed as altcoins Bitcoin have decreased more and more market share. This was the real turning point for altcoins. Investors began to see value in these BTC alternatives-and the market took on a life of its own.
What the current Bitcoin dominance indicates
The current Bitcoin dominance shows that altcoins are on the rise again. The recovery of dominance that BTC has maintained in recent years has declined with the current bull market. The new technology of altcoins has caused investors to prefer altcoins over BTC.
The search for the” next Bitcoin ” is an important driving force for this assumption. The current price of BTC turns out to be too high for investors. Therefore, many investors have turned their attention to the search for a possible “next BTC”. The low price of altcoins also means that investors can accumulate a large number of coins and wait for the assets to reach new all-time highs.
Decreasing market dominance does not have a significant impact on the BTC price itself. It merely indicates that altcoins are becoming more and more valuable. BTC is currently traded above $ 50,000. This makes it still the most valuable cryptocurrency in this area.
Text credit: Bitcoinist
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