Bitcoin Dominance Climbs to Highest Level Since October 2021 as Ethereum Underperforms

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Alex Dovb­nya

Bit­coin’s dom­i­nance has increased to high­est lev­el since late October

Bit­coin’s dom­i­nance spiked above 47% for the first time since Oct. 20 ear­li­er today.

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Image by tradingview.com

The king of cryp­to tends to grow its mar­ket share dur­ing major mar­ket cor­rec­tions due to grow­ing risk-off sen­ti­ment. Bit­coin is per­ceived as a safer bet than blue-chip alt­coins like Ethereum (let alone more obscure altcoins).

True Insights founder Jeroen Blok­land believes that the recent spike in Bit­coin dom­i­nance was dri­ven by the col­lapse of Ter­ra and Solana suf­fer­ing its sec­ond out­age with­in a sin­gle month. 

 The resilience of the orig­i­nal cryp­tocur­ren­cy has allowed it to eat away at the mar­ket share of alt­coins. In fact, Bit­coin’s mar­ket share has spiked more than 12% since the promi­nent algo­rith­mic sta­ble­coin project col­lapsed in May.

In ear­ly 2021, Bit­coin’s mar­ket dom­i­nance was as high as 71% after the lead­ing cryp­tocur­ren­cy start­ed out­per­form­ing in late 2020 by smash­ing its pre­vi­ous peak of $20,000.

How­ev­er, it then took a back seat in Feb­ru­ary, with Ethereum and Doge­coin steal­ing the spot­light in the first quar­ter of 2021. Bit­coin most­ly remained in the shad­ow of Solana, Ter­ra and oth­er projects through­out the remain­der of the year.

Bit­coin tends to regain pop­u­lar­i­ty dur­ing bear­ish cor­rec­tions. Apart from being viewed as a rel­a­tive­ly safe bet com­pared to alt­coins, it also has the high­est lev­el of liq­uid­i­ty. Due to tight order books, its price moves are small­er, which is why it is falling slow­er than alter­na­tive cryptocurrencies.

The mar­ket share of the largest cryp­tocur­ren­cy plunged to its cur­rent all-time low of 35.41%, but it then plunged to 62% in late 2018. Now that the dread­ed cryp­to win­ter is back, Bit­coin’s dom­i­nance will like­ly con­tin­ue climb­ing high­er unless there is a major mar­ket reversal.

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