The conversation in the world of crypto has been flipping back and forth between Bitcoin and Ethereum since the beginning of 2021. But if the recent performance of Bitcoin is anything to go by, it looks like the flagship crypto asset could be on its way to gaining a larger share of the market. According to TradingView, Bitcoin’s market capitalization has once again surpassed that of all other cryptocurrency tokens combined; its “BTC dominance” metric rose above the 50% mark on June 19—the highest since May 2021.
Bitcoin’s Dominance Fueled by Bullish Sentiment Amid FTX Crisis and Regulatory Pressure
Bitcoin’s rise is fueled by bullish sentiment amid the FTX crisis and US regulatory pressure on non-Bitcoin assets. It’s also important to note that Bitcoin’s dominance index has increased by more than 10.5% since Nov. 27, 2022, aided in large part by Bitcoin’s relative stability compared to other cryptocurrencies.
Bitcoin and Ether currently make up 70% of the crypto market cap, with predictions of reaching 80%. Of course, this isn’t an overnight development: Michael Saylor, the outspoken Bitcoin bull and MicroStrategy co-founder, attributes the current lack of “mega institutional money” in the crypto arena to the “confusion and anxiety” caused by the 25,000 alternative crypto tokens attempting to challenge Bitcoin.
That said, things are starting to turn in Bitcoin’s favor. Despite the initial price drop from China’s mining ban, Bitcoin has recovered and shown positive gains recently. Sentiment credits Blackrock’s Bitcoin Spot ETF filing as a major driver for Bitcoin’s price increase. (https://valorhealthcare.com)
SEC Lawsuit Against Binance and Coinbase Raises Concerns
The other major driver of Bitcoin’s rise is a string of regulatory clampdowns. The SEC recently brought a lawsuit against Exchange Binance accusing it of trading unregistered securities. After the accusation, a lawsuit was filed against Coinbase, claiming the same regarding altcoins like ADA, SOL, and MATIC. BNB has fallen 20% this month, while Bitcoin’s market dominance is approaching 50%.
Bitcoin needs sustained liquidity, volatility, and institutional investor interest to achieve its 80% market dominance goal. The Bitcoin/Ether ratio provides insights into the competition between Bitcoin and Ether in the crypto market.
Bitcoin’s Rise Positions It as a Dominant Global Digital Asset in the Future
The ETH/BTC pair has been trading in the 0.0676- 0.0655 BTC range since Jan. 24, suggesting that the prices of Ethereum and Bitcoin are currently aligned. If Ethereum’s market share reaches 20%, Bitcoin could potentially have a ‘Net Zero’ market share of over 80%.
The next weeks are crucial for crypto as investors closely watch the SEC’s decision on the Bitcoin Spot ETF. Ethereum’s performance against Bitcoin in the coming weeks is closely linked to Bitcoin’s overall trend. Bitcoin’s rise in the crypto world positions it as a dominant global digital asset in the future.
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