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Bitcoin Dominance Percentage Climbs to Highest Levels Since March 2017, What Does This Altcoin Contraction Mean for Crypto Market’s Future?

Bitcoin Dominance Percentage Climbs To Its Highest Levels Since March 2017, What Does This Altcoin Contraction Mean For The Future Of The Crypto Market?

The Bitcoin dominance percentage is now approaching 70%, its highest levels since March 2017, and up 37.5% from its all-time low of 32.5% in early January 2018. The Bitcoin dominance percentage is calculated by dividing the Bitcoin market cap by the market cap of all of the other cryptocurrencies combined and therefore is a good indicator of the strength of the Bitcoin market versus the strength of the altcoin market. The 37.5% rise in the Bitcoin dominance percentage since early 2018 indicates that altcoins have on average lost 37.5% of their value relative to Bitcoin during the past year and a half. This article explores why this increase in Bitcoin dominance percentage is happening, and what this means for the future of the cryptocurrency market.

Bitcoin dominance percentage and the dominance percentage of various altcoins courtesy of

A Brief History of Bitcoin’s Dominance Percentage

Before discussing why Bitcoin’s dominance percentage is rising while the altcoin market is contracting, it is important to recap the history of the Bitcoin dominance percentage. At the beginning of crypto, when Bitcoin was created by Satoshi Nakamoto in 2009, Bitcoin had a dominance percentage of 100% since it was the only cryptocurrency. By 2013, the Bitcoin dominance percentage declined to 95% as Litecoin and several other alternative cryptocurrencies entered the market. The rise of Ripple towards the end of 2014 caused the first major decline in the Bitcoin dominance percentage, to as low as 77%, while the Ripple dominance percentage peaked near 15%.

In early 2017, the Bitcoin dominance percentage was still as high as 87%, but that drastically changed due to the rise of Ethereum and the associated initial coin offering (ICO) bubble. By June 2017, the Bitcoin dominance percentage dropped as low as 37%, and the Ethereum dominance percentage hit an all-time high of 33.5%. This was the first time that Bitcoin’s dominance percentage declined below 50%, and the closest an alternative cryptocurrency came to overtaking Bitcoin’s dominance percentage.

During the major Bitcoin rally at the end of 2017, when Bitcoin hit an all-time high of USD 20,000, the Bitcoin dominance percentage rose as high as 66%. However, Bitcoin soon crashed as the bear market started, and the Bitcoin dominance percentage fell to the all-time low of 32.5%. This was partially due to the ICO bubble peaking about a month after Bitcoin began to crash, so while Bitcoin was crashing alternative cryptocurrencies were still rapidly gaining value.

The ICO bubble popped in early 2018, and numerous ICOs turned out to be scams or poorly planned projects, bringing about heavy investor losses and government regulations. The impacts of the ICO bubble collapse continue to this day, with the dominance percentage of ICO cryptocurrencies and Ethereum declining to 15% and 7.5% respectively. Ethereum was the most popular platform for ICO cryptocurrencies, and this is probably the reason it is losing market share as the ICO bubble deflates.

Aside from ICO cryptocurrencies and Ethereum losing value relative to Bitcoin, major alternative cryptocurrencies like Litecoin, Ripple, Monero, Dash, and Bitcoin Cash are also losing value relative to Bitcoin. This trend suggests that perhaps Bitcoin may eventually go back to the old regime of having 80-90% of the dominance percentage, while altcoins only account for a small fraction of the total cryptocurrency market cap.

Dot-Com Bubble Reveals How the Cryptocurrency Market Could Evolve

During the 90s, the internet first became available to average consumers, and this quickly led to the rise of the dot-com bubble as every possible internet business was created, and as investors rushed to put their money into these businesses. This is quite similar to the ICO bubble of 2017-2018 when every possible blockchain business was created, and a frenzy ensued as investors rushed in.

In 2000, the dot-com bubble burst, causing a majority of internet companies to go out of business, and simultaneously revealing that many of these internet companies were scams or poorly planned. Just like with the ICO bubble, government regulators jumped in to stop the practices that led to the dot-com bubble, further dampening the industry.

Ultimately, major corporations like Google, Facebook, and Amazon survived the dot-com bubble and went on to become some of the most powerful companies in the world. Essentially, instead of having a massive amount of companies launching and raising money, the internet industry consolidated into the hands of a smaller amount of companies that had good business plans and were fundamentally useful.

The striking similarities between the ICO bubble and the dot-com bubble perhaps reveal the direction that the cryptocurrency market is heading. Instead of having a plethora of cryptocurrencies that are launching and raising money, the cryptocurrency market may consolidate down to a handful of reputable major cryptocurrencies that are fundamentally useful. Indeed, the dominance percentage data suggests that this is exactly what is happening.

Bitcoin is the King of Cryptocurrency

As the ICO bubble continues to deflate, the expectations that any cryptocurrency will overtake Bitcoin has diminished to nearly zero. Indeed, the mentality during the ICO bubble was to invest in the next cryptocurrency that would become like Bitcoin, but now it seems no cryptocurrency can truly compete with Bitcoin. This is because Bitcoin performs the function of a cryptocurrency perfectly; Bitcoin enables users to send money anywhere in the world instantly and securely without using identification information, and the network is decentralized so no centralized entities like governments can attack Bitcoin.

Also, Bitcoin has a worldwide network of cryptocurrency exchanges, Bitcoin ATMs, and businesses that accept Bitcoin, making it easy to exchange the cryptocurrency with fiat currency worldwide, and enabling it to be a currency that can be used in real-life. Further, Bitcoin has the longest and most reputable track record, and is considered the most valuable cryptocurrency. This is causing newbies and average users as well as retail investors and institutional investors to generally choose Bitcoin instead of alternative cryptocurrencies, now that the ICO bubble has basically ended.

Thus, it appears the cryptocurrency market is heading towards a future where Bitcoin reigns supreme as the king, and perhaps there will be several other fundamentally useful cryptocurrencies that have some value as well. However, most of the thousands of cryptocurrencies that launched during the ICO bubble may continue to lose value until they cease to exist. Overall this will lead to a healthier cryptocurrency space where there are less scams and fewer investor losses. This can be compared to how a forest fire burns away the congestion of old-growth and undergrowth, paving the way for new and stronger trees to rise out of the ashes. is committed to unbiased news and upholding journalistic codes of ethics. For more information please read our Editorial Policy here.

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Bitcoin’s Dominance Percentage Over 50% for the First Time Since December 2017

Bitcoin’s dominance percentage is at 50.9% as of this writing on 12 August 2018 according to data from CoinMarketCap. The numbers are up 15% from May 2018 when the uptrend began. This is the first time since December 2017 that Bitcoin’s dominance percentage has risen above 50%, meaning most of the money invested in cryptocurrency is invested in Bitcoin.

Currently the Bitcoin market cap is USD 109 billion while the overall cryptocurrency market cap is USD 215 billion, which yields the 50.9% Bitcoin dominance rate. Ethereum’s dominance percentage has declined to 15.3%, since the Ethereum market cap is USD 33 billion. In June 2017 Ethereum’s dominance percentage rose to as high as 31.8% at the same time Bitcoin’s dominance percentage decreased to 39.2%, which is the closest Ethereum got to overtaking Bitcoin as the cryptocurrency with the most investment. Since then Ethereum has declined relative to Bitcoin, long term.

The rise of Ethereum’s popularity in 2017, alongside a wave of initial coin offerings (ICOs), most of which are based off the Ethereum blockchain, is the reason Bitcoin’s dominance percentage declined from the 80-90% range. ICOs have taken a big hit as regulators crack down on ICO activity across the world, and Ethereum is simultaneously losing value relative to Bitcoin, resulting in the dominance percentage upswing since May 2018.

It might be healthy for the cryptocurrency market, for Bitcoin’s dominance percentage to continue rising. Bitcoin is the most secure, most widely used, and perhaps the purest cryptocurrency. It truly is the gold standard of the cryptocurrency world. It would make things far less confusing for new investors if other cryptocurrencies continue to decline since it makes it more obvious that Bitcoin is the best investment choice. In general, if funds are diverted from other cryptocurrencies back to Bitcoin, that could fuel a strong Bitcoin price increase long-term which is beneficial for the entire crypto space. Especially since most crypto businesses prefer to transact with Bitcoin.

Since Bitcoin’s dominance percentage fell from the 80-90% range in early 2017, there have been 3 rallies in the dominance percentage. This includes the time when Bitcoin rallied to USD 20,000, and a smaller bump in the dominance percentage during March 2018 before the Bitcoin rally to USD 10,000. The current rally in dominance percentage is much larger than the bump during March and could be a positive sign that Bitcoin is entering a favorable setup for a rally. However, the past data for this sort of phenomena is so scant that using Bitcoin’s dominance percentage to predict price can’t be done with much confidence.

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