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Is Bitcoin Dominance Set To Soar?
As Bitcoin attracts more institutional capital and air time, Dominance could be set to rise sharply in the coming months.
Bitcoin Dominance refers to the percentage of the total value of all cryptocurrencies represented by BTC. It's a measure of the health and influence of the largest crypto, and the relative emphasis placed on bitcoin vs altcoins.
Right now, Bitcoin Dominance is surging as BTC sucks the oxygen out of the crypto markets—and there may be good reason to think it has a lot higher to go.
Bitcoin Dominance has slowly been increasing since the end of 2022, when it dropped as low as 38%. With greater confidence in bitcoin vs altcoins, which have seen harsh scrutiny and regulatory enforcement from the SEC, Dominance is now hovering around 50% according to CoinMarketCap.
Microstrategy CEO and Bitcoin visionary Michael Saylor notes the impact that Bitcoin's clear regulatory status vs ETH and altcoins is likely to have, suggesting that Bitcoin's Dominance could climb as high as 80%.
Regulatory clarity is going to drive #Bitcoin adoption by eliminating the confusion & anxiety that has been holding back institutional investors. Bitcoin dominance will continue to grow as the #Crypto industry rationalizes around $BTC and goes mainstream. pic.twitter.com/Foq4lpderj— Michael Saylor⚡️ (@saylor) June 13, 2023
Bitcoin: The Only Game In Town
As veteran trader Peter Brandt points out, Bitcoin was the first crypto, and has legitimacy and staying power where many later cryptos do not.
The entry of institutional money through Bitcoin ETFs would only consolidate the current trend, since those trillions of dollars of capital would have access to just one digital asset: Bitcoin. Under this scenario, it's not hard to see BTC outpacing every other crypto, even if some liquidity does then feed through to the rest of the market from "real" bitcoin holders who rotate profits into other assets.
For retail crypto traders, though, the idea of front-running any approval (assuming it happens) and capital inflows for Bitcoin ETFs will remain attractive for many months. Unless there is a compelling narrative, alts are likely to remain overlooked for the foreseeable future.
All of this has the potential to create a self-fulfilling narrative in which Bitcoin is the only game in town, and therefore continues to dominate institutional interest and the news cycle.
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