Bitcoin dominance falls under 40%

Bitcoin’s market dominance continues to decline, reaching below 40% this week. According to Tradingview data, this is very close to the Jan 2018 all-time low of 36.7%.

Market dominance for Bitcoin (BTC), refers to the ratio of BTC’s market capital and the total crypto market.

This is not the first time that dominance has fallen in 2021. Cointelegraph reported in May that BTC represented just 40.3% in total crypto asset capitalization. It was close to the same level in September.

Peter Schiff, a Bitcoin critic and Europac chairman, tweeted about the event Dec 29th, saying it was indicative of BTC’s “losing its competitive advantage as a first-mover”

Bitcoin’s market dominance has fallen below 40% for the first-time since June 2018. There are over 16,000 cryptos available. There are many cryptos that can be easily created with almost identical properties and #Bitcoin is losing its competitive advantage as a first-mover.
— Peter Schiff (@PeterSchiff), December 28, 2021

TradingPlatforms published research on December 27 that indicated an upcoming “alt season.” Altcoin market dominance has risen threefold in the past seven years, from 21% in 2014 up to 60% this month.

Ethererum (ETH) continues to hold a market dominance of over 20%, with almost $500 billion. ETH’s market dominance increased by almost 20% in the last year from 10%.

Crypto analyst “AltcoinSherpa” tweeted Dec 24 that the “altseason” had been in full swing for a whole year. The tweets referred to a chart that tracks BTC’s market dominance and suggested that the downward trend might continue.

#Altcoins – Mini thread here at ‘wen’ #Altseason Alt season has been ongoing for over a year. You just haven’t noticed it. This is the #Bitcoin dominance Chart. You can see alts have thrived since January 2021. $BTC $ETH
— Altcoin Sherpa (@AltcoinSherpa) December 23, 2021

It remains to see if institutional investments will be able to lower the dominance metric. CNBC’s Noelle Acheson, head of market insight at Genesis Trading, stated that she can see “strong signs,” of institutional crypto investment growth increasing during 2022.

She stated that institutional investment growth in cryptospace over the past 12 months has been “astonishing.”

Related: Bitcoin dominance rises once more as crypto market rallies

Analysts from JPMorgan, an international bank giant, stated in October that the BTC rally was fuelled by institutional investors’ increased appetite. They stated that institutional investors are returning to Bitcoin as an inflation hedge, possibly because they see it as better than gold.

Glassnode’s on-chain data shows that although BTC’s short term supply has declined by 32%, long-term investors added 16% to their treasuries in 2021, according to Glassnode.