Bitcoin Dominance – the relationship of Bitcoin’s market capitalization to the capitalization of other cryptocurrencies. As the capitalization of bitcoin is around 43.5% of the entire cryptocurrency market, it is quite correct to compare it with the rest of the market and look for some regularities in this, and this indicator is important for a trader and investor. It is important to understand that major cryptocurrencies such as ETH have a significant impact on BTC dominance, as they themselves have a large weight in the capitalization of all altcoins.
A bit of history In 2013, BTC dominance was 94%, bitcoin was almost the entire cryptocurrency market, ETH and stablecoins did not exist then. And when the word cryptocurrency was mentioned, there was a direct association – Bitcoin, by the way, now such an association still exists with the majority of the unsophisticated population.
By 2017, the situation had changed slightly, with the emergence of ETH, Ripple, Litecoin, Dash, Zcash. Bitcoin dominance at the beginning of the year was around 85%, while Ethereum occupied about 5% of the total capitalization. And in May 2021, Bitcoin’s dominance fell below 50% and never rose above this mark again. The reason for this is simple – a multitude of cryptocurrency competitors appeared, part of the market capitalization was reallocated to them, and now, in 2023, the market is much more fragmented.
