The post Bitcoin Dominance Hits 3-Year High Amid Market Turmoil appeared on BitcoinEthereumNews.com.

Bitcoin dominance surged to a three-year high amid the weekend’s market turmoil. Per data from Coinglass, Bitcoin dominance—the ratio of Bitcoin‘s market capitalization to that of all cryptocurrencies—is currently 55.6989%, marking its highest level since April 2021. At that time, the total market cap of all cryptocurrencies was $1.09 trillion, versus $1.2 trillion today. “Current market conditions are significantly different from those in April 2021,” Ruslan Lienkha, chief of markets at YouHodler, told Decrypt, explaining that today’s market is “much more transparent and liquid, with greater market depth and increased trading volume, characterized by less wash trading and fewer price manipulations.” During the 2021 cycle, he added, new crypto investors entered the market through Bitcoin purchases. “This year’s main driver of Bitcoin’s dominance is the rise of ETFs, which make Bitcoin accessible to traditional investors and institutions,” Lienkha said. Those investors are drawn to its “unique status as a highly decentralized asset,” he said, a feature that is “difficult to replicate compared to other blockchain projects.” Jake Ostrovskis, Trader at Wintermute, suggested that Bitcoin’s increasing dominance was a “flight to safety” within the crypto niche, with investors “shifting their focus back to Bitcoin, the most established and perceived safest asset in the crypto space” at the expense of “smaller, riskier altcoins.” Lienkha pointed to “segmentation of the crypto market,” with Bitcoin and Ethereum increasingly integrated into the institutional and traditional finance space through vehicles such as ETFs. Altcoins such as meme coins are “creating their niche, driven by traders who are less interested in established cryptocurrencies,” he added, predicting that the trend will continue. Ostrovskis noted that the increased presence of institutional players in the crypto space exposes it to greater influence from “macroeconomic factors and regulatory developments.” Altcoins “may find it challenging to maintain investor interest in such an environment,”…

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Filed under: News - @ August 6, 2024 6:08 am