Bitcoin has once again established its dominance in the market, surpassing the combined market capitalization of all other cryptocurrencies.
Recent data from TradingView reveals that Bitcoin’s market capitalization has soared, while its dominance metric exceeded 50% for the first time since May 2021.
This milestone comes after a period of volatility triggered by events such as China’s crypto mining ban and environmental concerns raised by Tesla.
As Bitcoin regains its footing, other cryptocurrencies, including Ethereum, Cardano, Solana, and Polygon, have experienced substantial declines relative to Bitcoin.
Bitcoin’s dominance in the crypto market experienced a notable decline in May 2021 when China announced a ban on crypto mining and Tesla distanced itself from the asset due to environmental considerations.
However, its recent resurgence has pushed the dominance metric above 50%, signifying its overwhelming market share.
A similar situation occurred in June 2022, as the entire crypto market faced a downturn following concerns about high inflation in the United States and subsequent monetary tightening by the Federal Reserve.
During this period, Ethereum’s value dropped even more significantly than Bitcoin, with the ETH/BTC pair ratio falling to just 0.05.
In recent months, altcoins such as Ethereum, Cardano, Solana, and Polygon have faced challenges in the market. A lawsuit filed by a US regulator against Coinbase alleged that these coins are unregistered securities, leading to a substantial decline in their value compared to Bitcoin.
The Securities and Exchange Commission (SEC) chairman, Gary Gensler, has reiterated his view that Bitcoin should be classified as a commodity.
Additionally, Binance, a prominent crypto exchange, faced a lawsuit from the SEC, which labeled its native token BNB as a security. As a result, BNB’s market value has plummeted by 20% since the beginning of the month.
Critics have often argued that Bitcoin’s dominance metric does not accurately reflect its true market share due to the inclusion of stablecoins, which are effectively digital representations of dollars trading on the blockchain. However, even the stablecoin market has faced challenges this year.
Following regulatory pressure, Paxos was compelled by the SEC to wind down its BUSD stablecoin in February, resulting in the removal of billions of dollars’ worth of tokens from circulation. These developments have contributed to Bitcoin’s increased dominance in the market.
Michael Saylor, the executive chairman of MicroStrategy, recently predicted that Bitcoin’s market dominance will rise to over 80% as regulators intensify their scrutiny of other digital assets.
As regulatory pressures persist, Bitcoin’s established position and recognized status as a commodity may further solidify its dominance in the cryptocurrency market.