Bitcoin dominates to 30-month high Spot ETFs could trigger a big bull market

By Krisztian Sandor, CoinDesk; Compiled: Pine Snow, Golden Finance

• Bitcoin’s cryptocurrency market share soared to 54.4%, the highest level since April 2021.
• One analyst noted that Bitcoin outperformed altcoins due to spot ETFs and risk aversion.

On Wednesday, Bitcoin (BTC) rose to a new 30-month high in market share among all cryptocurrencies as BTC continued to beat most altcoins.

Bitcoin dominance rate, which measures the relationship between the market capitalization of the largest crypto asset and the overall digital asset market. According to TradingView, Bitcoin dominance soared to 54.4%, reaching its highest level since the Great Bull Run in April 2021. Another way of saying it is that Bitcoin’s dominance rate of more than 50% means that Bitcoin’s market capitalization exceeds that of all other cryptocurrencies combined.

The index has been fluctuating between 39% and 49% for almost two years until it broke out of the range in mid-June. The breakthrough coincided with the news that BlackRock applied for a spot BTC ETF in the United States, with the price of Bitcoin rising above $30,000.

The investment landscape of digital assets continues to dominate this narrative, with observers generally viewing the possibility of eventual approval by the U.S. Securities and Exchange Commission (SEC) as near-certain, which could trigger a new wave of demand for digital assets.

The rise in bitcoin’s dominance can be explained by the cyclicality of the crypto market and Bitcoin’s lower risk appeal relative to alternative coins, including Ethereum (ETH), the second-largest cryptocurrency, as mentioned by Noelle Acheson, market analyst and author of the Crypto Is Macro Now newsletter.

“Bitcoin tends to lead early in the cycle in the crypto market, losing dominance only after investors become more risk-taking and smaller tokens outperform Bitcoin in performance,” Acheson noted. ”

She also added: "Bitcoin has ETFs (exchange-traded funds) and a safe-haven narrative, which is a favorable factor. Ethereum faces resistance from regulatory chills and upgrade uncertainty. ”

Bitcoin vs Ethereum

According to CoinDesk, the price of Bitcoin has risen by 32% over the past month. At the same time, Ethereum rose by only 12%, while its value relative to Bitcoin is close to levels not seen since May 2021.

If the time horizon is expanded, this performance gap is even more pronounced: the price of Bitcoin has doubled this year, while Ethereum has risen by about 50%.

Bitcoin’s bullish momentum could be a harbinger of an altcoin rally.

John Glover, chief investment officer of cryptocurrency lender LEDN, said in an email: "Historically, when the price of bitcoin rose, money started flowing into altcoins. ”

He added: "This means that the launch of one or more spot ETFs has the potential to trigger the next big bull run for the entire cryptocurrency ecosystem. ”