Last week was once again a veritable bloodbath for the cryptocurrency market. With a few exceptions, all top 100 cryptocurrencies suffered double-digit losses. Meanwhile, Bitcoin (BTC) yesterday expanded its market dominance, also called bitcoin dominance, to 50.8%. Although Bitcoin dominance reached a high for the year, total market capitalization fell to an annual low of around $ 214 billion.
Bitcoin dominance is an indicator that represents the percentage of total market capitalization contributed by BTC. This has risen steadily in recent months and has increased by 15 percentage points since May 13 from 35.8%. Over the same period, the capitalization of all other cryptocurrencies has largely declined.
The last time the BTC dominated over 50 percent, the signs were a little different. On 19th December, Bitcoin’s price was around $17,600, which was 65% higher than today’s rate.
According to CoinMarketCap, Bitcoin’s market capitalization is currently around $108 billion, compared to around $106 billion for all other cryptocurrencies. The current total market capitalization is thus around 214 billion US dollars. The highest market capitalization for 2018 was reached on January 7, 2018, at approximately $834 billion. This was also the highest market capitalization for cryptocurrencies ever. Since mid-May, nearly $200 billion has flowed out of the crypto market.
Interestingly, it is currently observed that despite the bloodbath people flee from Altcoins into Bitcoins. Typically, investors tend to transfer their fortune into bearish cohorts, such as tether, during bear cycles. This could show that investors see a good opportunity to buy bitcoin at a low price. Tom Lee, co-founder and head analyst at Fundstrat Global Advisors, recently commented that Bitcoin’s growing dominance is also a sign that recovery is in the offing.
Many are currently speculating about the reasons for the downtrend. The sharp decline in Bitcoin exchange rate is attributed, by many, to the announcement of the SEC related to the decision on the highly anticipated support by CBOE vaneck / SolidX-Bitcoin ETF to the extended deadline in September. Some others speculate that it is the whales that manipulate the market and are, therefore, to be blamed again.
Apart from that, there has been a lot of positive news in recent weeks that did not trigger a positive price movement. First and foremost, ICE, the operator of the New York Stock Exchange (NYSE), announced a new project – a digital cryptocurrency platform called Bakkt in collaboration with reputable companies such as Microsoft, Starbucks, BCG.