Bitcoin dominance steady for a year

According to CoinGecko data, Bitcoin’s dominance is just under 41%. 

Bitcoin loses ground on dominance exerted in the crypto market

This is a relatively anomalous figure, especially when compared to the past. 

What is anomalous is especially the consistency with which dominance continues to hover around 40%. 

Comparing the last two post-halving cycles, in fact, we see that at the peak of the last cycle, in mid-December 2017, dominance had risen to 66%, then plummeted to 32% in mid-January 2018. After that, however, it had rebounded to 57% in December, and then rose again to 71% in September 2019. 

By contrast, in May last year Bitcoin’s dominance had already dropped to around 40%, only to recover slightly to 46% in July. It has never since risen above this threshold, even falling to 37% in January this year. 

In other words, it has now been consistently below 50% for more than 13 months, fluctuating between 37% and 46%. 

In the past, not only have we never seen such a sustained period of low volatility for Bitcoin dominance, but we have also never seen such a long period consistently below 50%. 

Certainly, some of the impact on this dynamic has paradoxically resulted from stablecoins, whose market capitalization is extremely stable but has grown tremendously since last year. In fact, the calculation of dominance is done by also taking into account the market capitalization of stablecoins. 

Ethereum‘s has also been relatively constant for some time now, as it has peaked from 18% in May 2021 to nearly 21% in December, and bottomed out a few days ago below 14%. 

On the other hand, what has also been fairly constant since May 2021 is the ratio of BTC’s market capitalization to that of ETH. 

Values and performance of the market’s two most capitalized cryptocurrencies

While during 2018 it had risen from a low peak of 1.4 in February to 6.8 in December, with further growth to over 10 in September 2019, in contrast, after falling below 2 in May 2021 it has never again exceeded 3, except for a brief occasion last month. 

Currently, BTC’s market capitalization of about $392 billion is 2.7 times that of ETH, or $142 billion. 

So over the past thirteen months, the prices of the two major cryptocurrencies have proceeded in broadly similar fashion, with declining dominance mainly due to the growth of stablecoins. 

In other words, the crypto markets seem to be increasingly moving almost in unison, with minimal differences between the major cryptocurrencies. It is worth mentioning, however, that in 2018 the resurgence of Bitcoin’s dominance began precisely after July.