January 23, 2021

Cryptheory

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Bitcoin Dominance Broke a High Not Seen Since March 2017

2 min read

Bitcoin’s market dominance reached 72% on January 2, marking a high that hasn’t been achieved since March 2017. 

Bitcoin has always had the largest market cap in the cryptocurrency industry, but as ICOs boomed and Ethereum came into the picture, they ate into Bitcoin’s market share. As ICOs died out, however, Bitcoin’s market dominance has been on the rise—and now it’s reaching levels we haven’t seen for almost four years. 

Bitcoin market dominance is a figure that is used to capture Bitcoin’s value relative to the rest of the cryptocurrency market. For some, the Bitcoin dominance index is meant to show how important Bitcoin is to the wider crypto industry. 

Bitcoin’s market dominance is also used to gain insight into the confidence investors have in the Bitcoin market, meaning the higher Bitcoin’s dominance is, the more confident people may be in Bitcoin compared to other crypto assets. 

That certainly makes sense given the context of Bitcoin’s increasing price. 

Bitcoin’s record-setting bull run

Bitcoin has recently embarked on an unprecedented bull run that has seen all-time high after all-time high. 

During December 2020, Bitcoin’s price increased from $19,633 to $29,001, marking a 47% increase during the final month of the year. 

With a current price of about $39,000, Bitcoin is already up by 32% since the start of 2021. The current price also represents a 12% increase during the last 24 hours.

Given this bull run, confidence in Bitcoin is also seemingly at an all-time high, even prompting the attention of an NFL linebacker. 

A report released today by cryptocurrency exchange Kraken also shows that Bitcoin whales—individuals or entities that hold over 100 Bitcoin—are growing. 

The report shows that the total number of Bitcoin whales has broken above 16,300, a figure that hasn’t been seen since March 16, 2020. 

Bitcoin’s competitors

As Bitcoin’s market dominance reaches figures above 70%, other popular cryptocurrencies have seen their share of the market change as well.

Ethereum, considered by many to be Bitcoin’s biggest competitor, has increased its market dominance from about 7% at the start of 2020, to approximately 11% today. 

Bitcoin Whales Are Rapidly Growing Their BTC Holdings: Report

But other cryptocurrencies have not been so fortunate. Bitcoin Cash, which was created after a Bitcoin fork, started 2020 at a market dominance share of about 2%. Fast forward to today, and that dominance has declined to roughly less than 1%. 

Another cryptocurrency that has seen its dominance decline is XRP, which is currently embroiled in a controversial regulatory battle with the Securities and Exchange Commission. 

At the start of 2020, XRP’s market dominance was as high as 4%. Today, that has dropped to approximately 1%. 

It gets lonely at the top. 

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