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Exploring Bitcoin Dominance

Bitcoin is a digital currency that was created in 2009 by an anonymous programmer (or group of programmers). There is no central bank to issue new bitcoins or track transactions. Instead, the currency is managed collectively by a peer-to-peer network, and it relies on an open-source cryptographic protocol to ensure the legitimacy of transactions on various cryptocurrency exchange.

Define Bitcoin Dominance

Bitcoin dominance refers to the current percentage of the entire cryptocurrency market that is represented by bitcoin. It is an indicator of the health of the cryptocurrency ecosystem because it tells you how much demand there is for new coins coming into circulation and whether any one coin is becoming more popular than others.

A high value for bitcoin dominance indicates that most people are still investing in bitcoin, which means they believe it will continue to be a reliable asset and a store of value. This is good news if you’re invested in bitcoin, as it suggests that folks are not losing faith in it—but it’s not necessarily good news for altcoins, which might struggle to gain market share while speculative money remains focused on bitcoin.

On the other hand, a low value for bitcoin dominance indicates that investors are diversifying their holdings into other coins and believe they can capture greater gains by spreading out their risk. 

This is bad news if you’re invested in bitcoin, as it suggests that folks’ confidence in its value might be starting to fade. For altcoins, however, a low value for bitcoin dominance suggests that investors are now willing to take risks on other cryptocurrencies, which could help them increase their market share and gain greater visibility.

Relation of Bitcoin Dominance With Market Capitalization

Bitcoin dominance is a measurement of the percentage of market capitalization that Bitcoin represents in relation to the total value of all cryptocurrencies. This is a metric that can be used to gauge Bitcoin’s overall popularity and market strength.

The dominance of Bitcoin refers to the proportion of total market capitalization that Bitcoin commands. For example, if crypto has a market cap of $3 million and Bitcoin has a dominance of 50 percent, it means that Bitcoin accounts for $1 million of that $3 million total. Although Bitcoin is being the cream of the crop, its counterpart, USTC coin is slowly sliding its way to becoming a top gainer.

The way to calculate the dominance is by taking the percentage of the total cryptocurrency market cap that one crypto occupies and dividing it by Bitcoin’s market cap. The resulting figure is then multiplied by 100 to express it as a percentage.

Factors Affecting Bitcoin Dominance

Many factors can influence the dominance of Bitcoin. The main factor that affects Bitcoin dominance is its market capitalization. This is a measurement of how much the entire market values all of the Bitcoins in existence. When the total value of Bitcoins on the market increases, so does their dominance over other cryptocurrencies. 

Another factor that greatly affects Bitcoin Dominance is price stability. If the Bitcoin price experiences extreme highs or lows and it becomes difficult to predict future changes in value, then Bitcoin loses its dominance to other cryptocurrencies with a more consistent value, such as Ethereum and Litecoin. 

Moreover, if Bitcoin becomes extremely slow to handle transactions, or if there are long processing periods for transactions to go through, then users may turn to other coins with a shorter delay time for confirmation of payment details and therefore use them more often than Bitcoins. 

This was particularly an issue when it was discovered that some people were making fraudulent purchases using stolen credit cards on major e-commerce sites such as Amazon, who were accepting Bitcoin as payment but not sending out refunds until the fraudulent charges had been cleared from their accounts. 

As a result of this lag time, many users lost large amounts of money and turned away from using Bitcoins as payment because they felt too vulnerable to these types of scams happening to them again.

Utilizing BTC Dominance

Bitcoin dominance refers to the percentage of money currently in Bitcoin. It is a useful number if you want to determine whether Bitcoin is overvalued or undervalued.

Mitigate Risks

While it’s exciting to watch Bitcoin Dominance rise, sometimes the volatility and unpredictability of Bitcoin can be difficult to manage. When you’re dealing with an asset that has volatility, it can be challenging to figure out how to manage the investment.

One of the simplest ways to reduce risk is by diversifying your portfolio, so let’s take a look at how you can apply this approach to your Bitcoin strategy. While diversifying isn’t necessarily risk-free, it does give you more options if you decide to sell at some point.

Pushing More Capital Flow Into Altcoin

Bitcoin Dominance is at an all-time low. The low Bitcoin Dominance means that the altcoins have never had a greater opportunity to increase in value and market capitalization than they do right now. 

Historically, when Bitcoin’s Dominance dropped below 70%, it has been a very strong indicator that the previous bear market was ending. A few good altcoin investments during this window of opportunity can potentially lead to great returns.


The only way that this dominance will decrease is if another currency comes along and challenges it. However, there are few cryptocurrencies that are able to challenge bitcoin. Some try to improve on bitcoin by changing things like transaction speed or cost, but they almost always require a lot more power than bitcoin to run effectively, which means it will be hard for them to ever catch up to its price and market cap.

Alexia Hope

Alexia is the author at Research Snipers covering all technology news including Google, Apple, Android, Xiaomi, Huawei, Samsung News, and More.

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