Today marks the day that Bitcoin’s dominance of the cryptocurrency market reaches 64.89%, a value it hasn’t hit since January 2021. This happened concurrently with Bitcoin’s price hitting the $97,000 mark on Friday morning. As per TradingView’s data, BTC’s dominance, or mastery, which is estimated by bitcoin’s market cap divided by the total market cap, increased from 57.90% at the beginning of this year.
Dominance Trend
There is clear evidence supporting increased dominance of Bitcoin in the market since the start of this year. The increase of around 57.9% proves that Bitcoin’s market share and dominance are increasing.
Prior Drop
Reporting claims suggest there was a drop to 55% dominance by the start of December. This was caused by altcoins being pushed to all-time highs because of post-Trump election euphoria.
Tariff Impact
Positive sentiments turned into fear over Bitcoin and the altcoin surge after Trump enacted tariffs over February and March. Policy explanation suggests investors were not trying to get highly speculative altcoins.
Bitcoin Outperform
Although Bitcoin was heavily reliant on post-tariff fallout, recent exemptions have given it a boost. This surge occurred without major alts fully recovering, creating diverged performance.
ATH Proximity
With Bitcoin reaching $97,000 on Friday, it marked a new four-day high and leaves it at 10.9% of its January all-time high of $108,786. This shows that Bitcoin still is leading the charge of recovering digital assets, even if lagging behind significantly in percentage terms.
Altcoin Declines
As per data procured from CoinGecko, major altcoins show steeper drops from the highest set in December or January. Ethereum is down 54%, Solana is down 43%, and Dogecoin is down 61%. Anywhere else these gigantic numbers would shine, but not when compared with Bitcoin’s performance during the same period.
Resilience Reasons
Talking to Decrypt, Morrison, Senior Market Analyst at Trade Nation, placed emphasis on the fact that Bitcoin outperformed for various reasons, including first mover advantage.
Friendly Environment
Morrison pointed out that bitcoin’s “acceptance” compared to its peers and more speculative coins is backed by a far better regulatory environment that does not look like changing for worse any time soon under the Trump administration.
Supply and Bounce-Backs
Morrison also explained retail/institutions look to Bitcoin as an attractive investment because of its limited supply as compared to many altcoins. He added, “It has also shown resilience despite recent market turbulence, and investors can now see a decent history of bounce-backs following large pullbacks. This demonstrated history of recovery enhances its appeal.”
Change in Investors
It is reported that Bitcoin’s value is being supported by investor flight from US Treasuries and other US-based assets. Recent statistics have shown that Bitcoin ETF flows are said to surpass gold ETF flows by $4 billion this past week. This suggests a massive shift towards trusting digital assets as a safe store of value.
Institutional Alignment
Morrison suggested this could further support dominance gains. Bitcoin could sustain its dominance,” he quoted, “Institutional demand could help increase Bitcoin’s market dominance, particularly should it rise further and break above 70% or so.” He continued, “Far more confidence exists in Bitcoin compared to most altcoins, although a few of the latter will benefit because of their particular functionalities.”
Reversal Potential
The source notes the situation could alter in the event that the US brokers a trade deal with China/the rest of the world. There are some signs of the Trump administration being ready to negotiate (Beijing with an offer). Positive macro signals could lead to a bullish market.
Altcoin Opportunity
A risk taker is more likely to seek a better investment opportunity outside Bitcoin. Morrison remarked, “If this trend continues worsening, risk appetite has typically been the cause of investors and traders looking past Bitcoin.” He concluded, “There should be decent opportunities for more speculative coins, and no doubt some of these can outperform Bitcoin in percentage gains.”
