According to data from CoinMarketVap, Bitcoin (BTC) now makes up 50 percent of the entire cryptocurrency market capitalization.
Specifically, CoinMarketCap’s bitcoin dominance rate (which is an indicator that tracks the percent of the total cryptocurrency market capitalization contributed by the leading cryptocurrency) reached 50 percent for the first time since December 19th, 2017.
To calculate exactly: at the time of writing, bitcoin’s total market capitalization now stands a $105,785,552,545, which is about $901 million more than the market capitalization of every other cryptocurrency combined.
Bitcoin’s overall dominance rate has been on a steady rise over the past few months, currently representing a 14 percentage point increase from May 1st. In the same time period, the market dominance of all other cryptocurrencies has largely been on the decline.
The last time bitcoin’s market dominance was above 50 percent, conditions were much different.
On Dec. 19th, the average price of BTC was $17,605.81 across exchanges (a 65 percent higher price than the cryptocurrency’s value today).
It is important to note for our readers what this information means in practice. Bitcoin, even before today’s dominance of the overall market, was the first cryptocurrency. It has always been the largest by market cap and remains first in terms of brand recognition.
If you ask the average person if they know what cryptocurrency is, the most common reply tends to be, “you mean like Bitcoin?” At best, they might mention Ethereum as well.
But no other cryptocurrency has the adoption and recognition of Bitcoin. It exerts a gravitational pull on the entire crypto market.
As a result, altcoin prices have an interesting relationship with Bitcoin’s prices. When the price of Bitcoin falls, as it has been over the past week, altcoin prices tend to mirror it closely and fall as well.
When Bitcoin prices rise on the other hand, there is not as strong of a correlation. Altcoin prices tend to spike individually based on their own news or project developments.
This is because Bitcoin is (correctly or incorrectly) generally viewed as the main indicator for the health of the broader cryptocurrency markets. If you are trying to short the altcoin markets, watching Bitcoin prices is actually a pretty solid indicator to rely on.
It’s interesting to note that despite Bitcoin prices collapsing, people are fleeing altcoins INTO BITCOIN. Normally, investors tend to transfer their wealth into stablecoins such as tether during bear cycles. What this market dominance may show, however, is that investors see a good opportunity to buy bitcoin at a low price.
Featured image courtesy of Shutterstock.