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The recent surge in Bitcoin’s dominance of the crypto market has pushed its share of the total crypto market capitalisation to around 49%. This is the highest level seen in two years, with Bitcoin now contributing around 90% of the total market capitalisation. There are several likely reasons for this, including:
1) Institutional money is flowing into Bitcoin: The increasing involvement of institutional investors in the cryptocurrency industry has helped to lift the price of Bitcoin and increase its market dominance. Institutional investors tend to favour larger and more established crypto assets such as Bitcoin, helping to push its market share higher.
2) High demand for Bitcoin from retail investors: Retail investors have been pouring into the crypto market, with many purchasing Bitcoin as their first cryptocurrency investment. This has contributed to the surge in Bitcoin’s dominance.
3) Market maturing: The crypto industry is maturing and more investors are allocating funds to other promising projects outside of Bitcoin. As this happens, Bitcoin’s market share is likely to slip from its current levels.
4) Fear of missing out: Investors don’t want to miss out on the Bitcoin rally and are buying into the asset in order to avoid FOMO.
Overall, the recent surge in Bitcoin’s market dominance is mostly due to increased institutional and retail interest in the asset. Though it’s unlikely that Bitcoin’s dominance will remain at this level for the foreseeable future, it has become clear that Bitcoin is likely to remain the most popular and valuable cryptocurrency for the foreseeable future.