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Bitcoin’s Crypto Market Dominance Rises to 50% and It Could Go Higher, Say Analysts

Bitcoin’s Crypto Market Dominance Rises to 50% and It Could Go Higher, Say Analysts

Bitcoin’s Crypto Market Dominance Rises to 50% and It Could Go Higher, Say Analysts

Hopes for a spot bitcoin ETF and the latest regulatory actions could prove to be further catalysts.

Hopes for a spot bitcoin ETF and the latest regulatory actions could prove to be further catalysts.

Hopes for a spot bitcoin ETF and the latest regulatory actions could prove to be further catalysts.

AccessTimeIconSep 18, 2023, 9:32 PM
Updated Sep 19, 2023, 12:28 PM

Bitcoin (BTC) has been running in place for the last month – its current price of $26,700 essentially flat from 30 days ago – but its market dominance has been on the rise as risks rise for the rest of the cryptocurrency sector.

The Bitcoin market dominance rate, which tracks the largest cryptocurrency's share of the total digital asset market, rose to 50.2% earlier on Monday, its strongest level in a month and near a 26-month high of 52% reached at the end of June.

Taking a broader view, bitcoin’s market dominance was in a range between 39% and 49% for more than two years before it broke out to that 52% level in June after asset manager BlackRock’s filing for a spot BTC exchange-traded fund spurred hopes about unleashing massive inflows into the asset.

Markus Thielen, research head at crypto services provider Matrixport, explained in an interview Monday with CoinDeskTV that BTC enjoys more “potential buying pressure” from the ETF listings, while alternative cryptocurrencies – also known as altcoins – may be on the brink of breaking lower. He noted bankrupt exchange FTX’s token sales, declining Ethereum protocol revenues and upcoming token unlocks – which allow venture capital investors to sell tokens – among risks on the altcoin market.

“BTC peaked so far this year in July, while ETH peaked in April,” Thielen said. “All these [ETF] announcements haven’t really benefitted altcoins, not even ether.”

Macro analyst Noelle Acheson noted that bitcoin would likely benefit from the latest regulatory changes proposed by the New York Department of Financial Services (NYFDS) Monday, including stricter rules to list cryptocurrencies on exchanges while simultaneously green-listing BTC as a digital asset that license holders can list or custody without further regulatory hurdles.

“The immediate impact on crypto markets could be further rotation into BTC, as it consolidates its status as the ‘safe’ crypto asset,” Acheson wrote in a newsletter.

Edited by Stephen Alpher.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.