Bitcoin (BTC), the most popular cryptocurrency, has seen a steady increase in market dominance. This comes despite its price remaining relatively stable over the last month, with a market value of $520 billion and a price of $26,690.
At the moment, alternative cryptocurrencies are either stagnant or decreasing in value compared to Bitcoin. However, it is worth noting that the price of BTC is 5% lower than its June peak and 23% lower than its January peak.
On Monday, Bitcoin’s market dominance rate was 50.2%, its highest level in a single month, and close to its June peak of 52.2%. For two years, the alpha coin’s market dominance had been between nearly 40% and 49%. This increase was triggered by asset manager BlackRock’s application for a Bitcoin exchange-traded fund, which led to hopes of significant inflows into the asset class.
In September, investors are preparing for a possible decline in Bitcoin’s value. This is due to the rising likelihood of a global recession and persistently high inflation. Nevertheless, some analysts believe that new investments will lead to significant price increases, which will help Bitcoin maintain its dominance in the crypto market.
Research Head at Crypto Services Provider Matrixport, Markus Thielen, commented that Bitcoin has more “potential buying pressure” due to the ETF listing, which may lead to a break lower in altcoins. This is due to declining Ethereum protocol revenues, upcoming token unlocks and future tokens.
Macro analyst Noelle Acheson added that the New York Department of Financial Services recently proposed stricter rules for listing cryptocurrencies on exchanges but has green-listed BTC to be listed and custody by digital asset license holders without additional regulatory hurdles.
Though the cryptocurrency market has a major liquidity problem, Bitcoin’s resilience and popularity are still evident. Despite a rapid retracement after a 2% increase, Bitcoin has a tendency to increase in value during times of market decline, making it the most popular and widely used digital currency. Investors’ reactions to current events will determine whether Bitcoin loses ground to NFT tokens or stablecoins.
