Bitcoin, the flagship cryptocurrency asset is currently in the limelight after experiencing a price recovery, enabling BTC to surpass the $61,000 threshold. Following the positive move, the coin has once again demonstrated its supremacy in the cryptocurrency space and solidified its position as the top valuable digital asset, with its market share reaching a peak not seen in more than 3 years.
The Market Is Becoming More Dominated By Bitcoin
CryptoQuant, a leading on-chain analytics platform shared the positive development on the X (formerly Twitter) platform, which represents BTC’s increasing power and tenacity in the ever-evolving and volatile world of cryptocurrencies. Bitcoin dominance has increased despite recent market fluctuations, attracting a bigger share of the total market capitalization of digital assets.
According to the platform, in comparison to the market cap of Ethereum, the second largest crypto asset, Bitcoin’s dominance has grown significantly, reaching a 40-month high of about 78.5%. This rise in dominance suggests that crypto investors are more in demand for BTC, whereas Ethereum’s attraction has not been able to keep up.
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In the chart below, you can see how Bitcoin’s dominance has expanded relative to Ethereum’s market cap, now hitting a 40-month peak with a dominance of 78.5%. This indicates a stronger demand for Bitcoin among investors, while Ethereum’s appeal has not (yet) matched up.
The on-chain platform revealed that the dominance of BTC started to ascend in late 2022 due to the mounting rumors surrounding a Spot Bitcoin Exchange-Traded Fund (ETF), which was later approved in January this year and has seen substantial inflows ever since.
Despite a similar scenario happening with Ethereum, this trend still has not changed. Specifically, this is demonstrated by the low figures for the spot Ethereum ETF, which shows the restricted demand for ETH.
Given that major events like the Initial Coin Offering (ICO) bubble and bubble peak are able to alter this trend as seen in 2021, CryptoQuant contends that ETH will need to experience an equally significant event in order to tamper with this trend, and potentially dominate the market.
Since altcoins find it difficult to sustain momentum, BTC’s increasing dominance highlights investor trust in the cryptocurrency’s long-term value, underscoring its resilience and appeal as a dependable store of value.
BTC Price Experiences Bullish Performance
Currently, Bitcoin is displaying a positive momentum after rebounding from the $58,000 support level. With the growing optimism around the crypto asset, it is likely to attract more gains as the bulls seem to have taken control of the market once again.
Furthermore, with the FOMC meeting coming up in September, several analysts believe that the event will serve as a catalyst for a price surge once the Federal Reserve (FED) cuts down rates.
At the time of writing, Bitcoin had garnered gains of over 3% in the past week and was trading at $61,155. Its market cap and trading volume have also increased by more than 3% and 0.67% respectively in the past day.
Featured image from Unsplash, chart from Tradingview.com