Bitcoin is now the most dominant force in the crypto market, surpassing 53% of the total crypto market—stronger than it has been in three years.
Bitcoin’s market cap now stands at $1.27 trillion, according to CoinGecko data. By contrast, crypto’s total market cap is $2.43 trillion, with 15.9% of the market occupied by Ethereum, worth $389 billion.
The upward climb of Bitcoin dominance this year is an unusual one, given that altcoins usually thrive better than Bitcoin in a bull market environment. Although meme coins did make a strong comeback during Bitcoin’s surge to all-time highs earlier this year, the so-called “wealth effect” wasn’t as thoroughly enjoyed by coins in the middle of the pack—such as Ethereum and Cardano.
“ETF flows fundamentally altering market dynamics,” wrote Meltem Demirors, former chief strategy officer at CoinShares, to Twitter on Wednesday. “No longer do BTC gains cycle into alts and the longer tail of crypto assets.”
Bitcoin’s takeover has even continued amid steady growth in the market cap of Tether (USDT), the world’s largest stablecoin and third largest crypto after BTC and ETH. Stablecoins are backed by fiat currencies and are excluded from some measures of Bitcoin dominance due to having fundamentally different value models.
The rise has even kept pace after the launch of Ethereum spot ETFs last week, which ironically culminated in a sell-the-news event, and net outflows from the new investment products since going live. That’s gone against the predictions of K33 Research so far, which predicted that ETFs will catalyze growth for ETH over the next five months.
Despite the poorer performance of alts, there is reason to believe they’re primed for a comeback very soon.
CryptoQuant CEO Ki Young Ju said on Tuesday that whales are “preparing for the next altcoin rally,” as limit buy orders for non BTC and ETH assets are on the rise.
The executive shared a chart showing that the “cumulative buy-sell volume difference” has been rising over the past several months.
“The indicator measures the difference between buy and sell orders over a year,” CryptoQuant told Decrypt. A buy/sell order is a pre-set demand to buy or sell a cryptocurrency if it reaches a certain price level, which creates levels of resistance and support.
“If the trend is going up, it means more people are placing buy orders, showing strong interest in buying,” CryptoQuant said.
Edited by Ryan Ozawa.
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Source: https://decrypt.co/242677/bitcoin-dominance-crypto-market-three-year-high-altcoins
