Here’s why Bitcoin’s dominance is less likely to wane anytime soon, and what it means for altcoins

Despite the turmoil in bitcoin prices over the past week, Ki Young Ju, the founder and CEO of market analysis platform CryptoQuant, believes the leading digital asset’s dominance is less likely to wane anytime soon.

Historical data shows that alternative cryptocurrencies (altcoins) have always recovered when BTC retraces and has seen a decline in market dominance during bull cycles.

Ju’s findings indicate that the altseason, where capital flows out of BTC and into altcoins, may not be as close as market experts have predicted.

Bitcoin’s dominance is less likely to fall

According to Ju, Bitcoin’s growth rate in this cycle makes it less likely that its dominance will collapse. The asset’s growth this year has been driven by several factors, including the launch of cash exchange-traded funds (ETFs) in the United States and President Donald Trump’s support for the cryptocurrency during his election campaign.

Data from CoinmarketCap showed Bitcoin’s market dominance, which was 57% at the time of writing, with a slight drop over the past week and month.

Ju noted that during bitcoin’s 37% market cap growth over the past few months, large-cap altcoins rose 16%, while small- and mid-cap cryptocurrencies gained 10 %. The only time small and medium coins outperformed BTC was during the memecoin season in April; since then, BTC has remained on top.

While BTC appears to be pulling back as investors take profits after the currency’s latest rally, Ju insists that the nature of capital flowing into the Bitcoin network could maintain the asset’s dominance and delay the ‘other season for some time. This bullish move in BTC is mainly driven by demand from spot ETFs and institutional investors, indicating a shift in capital inflows.

What is the fate of Altcoins?

Except for Ethereum, which represents 12.8% of the crypto market, other cryptocurrencies, including stablecoins and memecoins, represent 30.2% of the sector.

The 2021 bull cycle saw Bitcoin’s dominance fall to 40%, and altcoins accounted for 41% of the crypto market during the other season. This means that there is still room for growth among altcoins before they can have their rally.

For altcoin market caps to reach levels high enough to trigger another season, there needs to be a significant influx of fresh capital into crypto exchanges. Unfortunately, for these crypto assets, institutional investors and ETF buyers have no intention of rotating their investments from BTC to altcoins. Therefore, to trigger the next alternative season, altcoins must continue to rely on crypto exchange users or develop independent strategies to attract new capital.

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