The proportion of Bitcoin’s share in the total global capitalization of cryptocurrencies is back above 50 percent. Because of the fall in the price of altcoins in the past few days, Bitcoin gained more power. Last time when Bitcoin had such a high percentage in dominance was in December 2017.
Bitcoin was and still is synonymous with cryptocurrencies and although the first altcoins which came onto the market nearly following the launch of Bitcoin, their market capitalization was negligible compared to to the first coin in the chart. By the end of 2013, Bitcoin consistently accounted for more than 90 percent of the total market capitalization; it was not until mid-2016 that it fell below 75 percent for the first time.
The first cryptocurrency to really challenge the Bitcoin dominance was Ethereum, but not until the first half of 2017. Between April and June, the Bitcoin dominance fell from 70 to 37 percent with a significant crash. At the same time, Ethereum’s portion of the total market capitalization increased from 14 to 33 percent. Also in 2017 the commentators and analysts already saw an imminent change in dominance but that did not happen.
However, Bitcoin was able to rise again significantly in the second half of 2017 to more than 60 percent. Following Bitcoin’s rally and increase in dominance at the end of December, the rest of the crypto market jumped up. Therefore, a large part of the total market capitalization was distributed to Altcoins, which pushed the BTC dominance back 35-40 percent.
Just as the Altcoins profited from the bull market earlier this year, they are now undergoing a continuous drop in price. While XRP, Litecoin, IOTA have reached the annual low, the industry leader is still in position. For example, Bitcoin dominance has spiraled back to more than 50 percent of market share in 2018, while having the lowest market capitalization of the year ($ 207 billion).
While an increase in bitcoin dominance sounds like great news it does not necessarily mean an increase in price. However, Bitcoin is currently the cryptocurrency, which lost the least in contrast to the other coins. Meanwhile, the rising bitcoin dominance says something about the trading behavior in a bear market: If the prices fall, you are looking for safe assets instead of risky investments. Considering that most exchanges offer Bitcoin / Altcoin trading pairs, the investors are clearly choosing for the moment Bitcoin over any other cryptocurrency.