For a lot of crypto speculators, the market is very volatile and it can be hard to keep up with. If you’re not able to do your own research on what’s going on in this rapidly growing market, if you want something explained simply, these are for you.

Bitcoin, the first and most widely known cryptocurrency has been a mainstay in the market for years now. The dominance of BTC has fluctuated over time due to events such as forks and new coins being added but recent developments have led to a significant decline in Bitcoin’s share of the market. Is this just another downward trend or something more?Bitcoin dominance is a measure of the percentage of the total market cap that Bitcoin makes up. It is calculated by dividing the market capitalization of Bitcoin by the total market capitalization.。 Read more in detail here: bitcoin dominance chart.

Bitcoin was the only cryptocurrency accessible when it first appeared on the market a decade ago. At the time, it had a 100 percent share of the crypto market. Until 2017, Bitcoin represented for almost 95% of the market capitalisation of the cryptocurrency industry. Bitcoin’s market dominance has been weakened by the growth of altcoins such as Ethereum (ETH), Cardano (ADA), and Litecoin (LTC). Despite the advent of altcoins, Bitcoin continues to dominate the cryptocurrency industry with over 70% market share until January 2021, when its relative dominance begins to wane. Despite hitting an all-time high of $64,000 in April and a new all-time high of $66,000 on October 20, the price of Bitcoin rose to a new all-time high of $66,000 on October 20, propelled by reports that the first Bitcoin ETF will be launched. The basic rule is that as BTC dominance increases, altcoins lose value in comparison to BTC. And when BTC’s dominance declines, their value rises. Is this well-known tendency likely to change in 2021?

Bitcoin Dominance and What It Really Means for the Crypto Market

Since the beginning of 2021, Bitcoin’s supremacy has been on the slide, according to a TradingView graphic.

What is the reason behind Bitcoin’s continued dominance?

According to CoinMarketCap, there were 12,170 cryptocurrencies on the market at the beginning of March. Despite these data, investors continue to invest more than half of their cryptocurrency capital in Bitcoin. There is certainly a “Bitcoin bias” at work when some investors are determining how to diversify their holdings. For most individuals, Bitcoin serves as an entrance point into the crypto world since it is the most well-known and trustworthy cryptocurrency. People consider a bull market as a wonderful investment and want to get into the market as the price increases. When the price of Bitcoin climbs, fresh participants come to the crypto market, as we’ve seen time and time again. When money pours into Bitcoin instead of competing cryptocurrencies, the price of Bitcoin often rises, prolonging Bitcoin’s dominance. Then we witness the inverse, with investors investing their Bitcoin earnings in major altcoins, then small-cap altcoins, before returning to Bitcoin. Because Bitcoin is the entrance point for most new cryptocurrency users, the cycle keeps returning to it.

Bitcoin’s market share dropped from 73 percent to 40 percent in January. It still maintains a market share of less than 50% as of now. ETH, the biggest cryptocurrency, has surged in value by over 400 percent during this period, whereas Bitcoin has only gained by about 70-80 percent – this might be one of the reasons why Bitcoin is losing its supremacy in 2021. Plus, knowledgeable crypto traders know that when the price of Bitcoin rises, it frequently has a positive influence on the value of altcoins, particularly Ethereum, which has gained in popularity as a result of the Eth2 update and the proliferation of DeFi applications built on the platform.

We also can’t overlook the fact that, despite a few hiccups along the road, such as Solana’s (SOL) recent downtime, the valuations of the main altcoins are exploding in price; it’s now a matter of why invest your money in Bitcoin when there are more lucrative crypto assets? Despite two all-time high price hikes to over $60,000 this year, we think that the growth in altcoin values is the primary cause of Bitcoin’s current loss of supremacy. The speed with which Ethereum innovates, as well as competitor altcoins’ regular improvements to fulfill market needs, are major drivers in their gaining supremacy over Bitcoin.

The developing nature of the 2021 crypto market is another significant reason why Bitcoin’s supremacy is eroding. Frederick Vold, writing in CryptoNews, pointed out that the whole market capitalization exceeded the $2.5 trillion level in mid-October, indicating that the global crypto market value will expand in 2021:

“It’s worth noting that bitcoin’s share of the entire crypto market value is lower today than it was in April, when the bitcoin price reached an all-time high. Bitcoin’s market share in the cryptocurrency industry was at 54% at the time. Bitcoin’s market share is now between 44 and 46 percent (depending on the data source), having been reasonably constant around 40 percent since mid-May.

“The somewhat decreased bitcoin dominance this time shows that the market capitalizations of additional cryptocurrencies are increasing. However, it’s also worth noting that the number of altcoins is steadily increasing, reducing bitcoin’s proportion of the crypto market, everything else being equal,” Vold remarked.

BigONE’s Opinion

BigONE thinks that Bitcoin, as the most well-known and frequently discussed cryptocurrency, serves as a gateway for new consumers to join the cryptocurrency market. Because it has weathered the test of time and is the most respected cryptocurrency, it is simpler to convince new users of the value it provides, particularly while suspicions of Ponzi schemes continue in the market. In a recent FT story, Ian Taylor, the chief executive of advocacy organization CryptoUK, states, “There are a lot of frauds and criminal enterprises that target people, and it’s really essential to recognize that in an unregulated market there is no remedy.” Large institutional investors and regulators interested in learning more about the crypto industry may use Bitcoin as a starting point. Institutional investors may now obtain a safer exposure to bitcoin via the ProShares Bitcoin Strategy ETF, which is fueled by growing energy prices and raw material costs. According to a news statement, it completed the day with $1.1 billion under management after trading volume surpassed $1.2 billion. Bloomberg Intelligence data shows that this is the fastest an ETF has ever surpassed the $1 billion level.

We predict that user confidence in other cryptocurrencies will continue to rise, and that this will be the determining element in the contest for crypto market ‘dominance.’ Furthermore, Bitcoin’s impact in the crypto space is advantageous since it serves as a “trust gateway” for new businesses and individuals to comprehend and participate in the crypto sector. “Although Bitcoin is volatile, I think it will still dominate the market for a while,” Shaun Heng, vice president of growth and operations at CoinMarketCap, a cryptocurrency ranking and analytics website, told Cointelegraph. Bitcoin is the foundation for all other cryptocurrencies, and although I don’t anticipate it to reach the heights it has in the past, I also don’t expect it to fall much in the near future.” Anndy Lian, the chairman of BigONE, believes that Bitcoin will not be able to achieve the levels of dominance it had at the start of 2021 in the long run. “The fast evolution of the crypto industry, from the growth of stablecoins such as USDT and BUSD to the popularity of meme coins such as Dogecoin, provides the background for Bitcoin’s decrease in dominance.” However, I think Bitcoin’s price will soon reach new all-time highs, and with additional Bitcoin ETFs on the horizon, it will remain the cryptocurrency of choice for investors.”

The “bitcoin dominance coinmarketcap” is the percentage of the total market capitalization that bitcoin has. It can be used to predict how much money other coins will make.

Frequently Asked Questions

What does Bitcoin dominance indicate?

A: Bitcoin dominance is a market capitalization ratio, derived from the total value of all bitcoins over the total value of all available currency units. It can be compared to how much an individual bitcoin represents in relation to ones overall investment portfolio.

What is the Bitcoin dominance right now?

A: The Bitcoin dominance is calculated by dividing the market capitalization of bitcoins into that of all other coins. This means it represents how much value there is in bitcoin compared to other currencies, which can be used for comparison purposes within cryptocurrency markets and on a global scale.

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