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Bitcoin Reasserts Itself Taking Back Over 50% Crypto Market Share
After dropping to a low of 46 percent, Bitcoin dominance (Bitcoin’s market capitalization as a percentage of total cryptocurrency market capitalization) is back over 50 percent. In a bear market, Bitcoin is reasserting itself vis-a-vis altcoins.
The frenzied demand for altcoins over the past few months has resulted in almost all coins witnessing a multifold increase in price. It didn’t matter which altcoin you picked in March, almost all of them have gone through the roof. While Bitcoin price has steadily increased, its dominance has steadily decreased as altcoins (Ethereum, Ripple, Dash amongst others) outperformed it. Bitcoin’s dominance went below the psychologically important level of 50 percent on May 16, in spite of Bitcoin scaling agreement negotiations.
One of the real challenges to Bitcoin’s dominance has been Ripple. At its peak, Ripple had a market capitalization of $17 bln and accounted for about 25 percent of the total crypto market cap. However, over the last one week, its price has fallen sharply and it has lost approximately 60 percent of its value in BTC terms. The steady challenge to Bitcoin remains Ethereum, which now accounts for 20 percent of the total crypto market capitalization. The contribution of Ethereum to the total crypto market capitalization has remained between 15 to 20 percent over the last two months. Other coins like Litecoin, Monero, Dash and NEM have risen substantially but have not mounted a serious challenge to Bitcoin.
In a bear market like the current one, the demand for tether has increased substantially. Although the value of one tether is supposed to be pegged to $1, traders at crypto exchanges are paying up to $1.08 for one tether. Those buying tether are locking in profits by moving out of cryptocurrencies and would look to reenter the market at an appropriate time. The premium payable for tether is expected to go down, once stability returns to the crypto markets.
Chuck Reynolds
Contributor
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