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Bitcoin’s crypto market dominance is at risk – But why?

In this post:

  • Bitcoin is currently at $43,928.68, with a market capitalization of $860 billion, signifying a dominance of 50.18%. 
  • BTC bulls maintained their momentum throughout the end of the week’s Wall Street trading, with BTC/USD reaching new 19-month highs.
  • BTC ETF approvals are underway. Under the direction of Cathie Wood, ARK Invest has amended its S-1 filings with the SEC as of December 2, 2023, in preparation for a probable green light for their much-discussed Ark21Shares Bitcoin ETF.

Bitcoin has long reigned supreme as the undisputed leader, serving as both the pioneer and benchmark for countless digital assets that followed. However, a growing chorus of voices within the crypto community suggests that Bitcoin’s once-unassailable market dominance is now facing unprecedented challenges. 

The question echoing across forums and trading desks alike is: why is Bitcoin’s crypto market dominance at risk? This enigma has sparked intense debates and speculation as analysts and enthusiasts grapple with a confluence of factors that could potentially reshape the crypto hierarchy. 

Bitcoin dominance is at threat

As of now, Bitcoin comprises slightly less than half of the $1 trillion cryptocurrency market, as reported by CoinGecko. Bloomberg reports that Bitcoin’s market share was approximately 38% in January; however, it has since increased to 48.5% as investors have abandoned alternative cryptocurrencies in favor of the original cryptocurrency’s perceived security.

As of today, Bitcoin (BTC) is valued at $43,928.68 and has generated a 24-hour trading volume of $19,829,891,674.62. This signifies a price escalation of 0.15% over the last twenty-four hours and 13.22% over the last seven days.

The current value of the global crypto market capitalization is $1.71 trillion, representing a change of 0.7% over the past twenty-four hours and 92.66% over the past year. Bitcoin currently holds a market capitalization of $860 billion, signifying a dominance of 50.18%. 

Stablecoins, meanwhile, have a market capitalization of $131 billion, or 7.62% of the total crypto market capitalization.

As altcoins increase, BTC risks “rolling over” and canceling its previous uptrend, according to new research. On December 9, popular analyst and social media commentator Matthew Hyland became cautious about BTC price motion in a post on X (previously Twitter).

Bitcoin bulls maintained their momentum throughout the end of the week’s Wall Street trading, with BTC/USD reaching new 19-month highs of $44,729 on Bitstamp on December 8.

Hyland, on the other hand, sees more sinister signals that the bull run may be in peril after strong 60% gains from the beginning of October. He claims that the smoking gun is Bitcoin’s proportion of the whole crypto market valuation.

Dominance is rolling over as per the bear divergence that was noted. Has given back all the gains from the move up the other day […] If it breaks and closes below 51.81, it would be the first lower low in over a year and an end to the uptrend, along with a likely top put in.

X post

Bitcoin ETFs market performance

The financial world is closely monitoring Ark Investment’s spot BTC exchange-traded fund (ETF) application as the U.S. Securities and Exchange Commission (SEC) deadline of January 10, 2024 approaches. 

SEC, led by Gary Gensler, has extended its decision period by up to 240 days, recognizing the difficulties and public concerns concerning spot BTC ETFs. This extension comes after the financial regulator has previously rejected similar proposals. 

Cathie Wood created Ark Investment in 2014 to seek permission for an ETF to follow Bitcoin’s performance using data from several crypto exchanges as indexed by the S&P Bitcoin Index. The proposed ETF, which is the outcome of a collaboration with 21Shares, will be listed on the Cboe BZX Exchange.

Ark Investment has been carefully managing its cryptocurrency-related assets in the aftermath of the impending ruling. The firm recently sold roughly 102,672 shares of the Grayscale Bitcoin Trust (GBTC), netting around $3.6 million. 

On December 5, Ark also sold approximately 200,000 shares of Coinbase. Despite these sales, GBTC is still the third-largest holding in the ARK Next Generation Internet ETF (ARKW), accounting for around 8.36% of the portfolio.

Ark’s strategy of accumulating shares during market downturns and disposing of some holdings during market upturns is reflected in these transactions. This plan is consistent with the present market environment, as Bitcoin had tremendous growth in the fourth quarter of 2023. 

Wood voiced confidence in the likely approval in a recent interview with the Wall Street Journal, stating that such a step by the SEC would lend a new level of credibility to bitcoin ETFs. Wood also predicted a big increase in the price of Bitcoin, estimating it might reach $1 to $1.5 million. 

Bloomberg analysts evaluate the possibility of SEC clearance as greater than 60%, indicating a cautiously positive market attitude.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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