Based on a report by Kaiko Analysis, Bitcoin’s market dominance has elevated to 54.9% of the overall cryptocurrency market cap, reaching its highest stage since April 2021.
This improve displays the rising affect of Bitcoin, notably on the highest 50 altcoins, because it continues to outperform different digital belongings throughout instances of market uncertainty.
In the course of the sharp market sell-off on August 5, triggered by an surprising hike in rates of interest in Japan, Bitcoin’s cumulative quantity delta (CVD), a key measure of shopping for and promoting stress, remained optimistic on U.S. exchanges. In the meantime, altcoins noticed heavy promoting stress, additional highlighting Bitcoin’s position as a “secure haven” for buyers throughout turbulent instances.
Bitcoin’s CVD remained strongly optimistic from August 4-6, whereas the highest 5 altcoins struggled with widespread promoting on main exchanges, Kaiko Analysis analysts famous. “Bitcoin’s capacity to keep up optimistic shopping for stress whereas altcoins skilled sharp declines strengthens its standing as a most popular asset in the course of the sell-off,” the analysts wrote.
The launch of spot Bitcoin ETFs within the US in January 2024 additionally performed a major position in strengthening Bitcoin’s dominance. Based on the report, the launch of ETFs attracted the eye of institutional buyers who considered Bitcoin as an investable asset with decrease threat in comparison with altcoins. This influx of institutional capital helped Bitcoin consolidate its place at the same time as altcoins confronted higher volatility and better threat premiums amid a difficult macroeconomic setting.
As Bitcoin continues to realize floor, altcoins stay weak to fluctuations within the broader market. The Kaiko report confirmed that altcoins, notably the highest 5 altcoins by market cap, confronted vital promoting stress in the course of the August sell-off, and uncertainty surrounding these belongings persists.
*This isn’t funding recommendation.