Bitcoin’s market capitalization has once again surpassed the combined market cap of all other cryptocurrencies, as per data from TradingView. The BTC dominance metric reached over 50% on Monday, a level not seen since May 2021. Back then, Bitcoin’s price took a nosedive following China’s announcement of a total ban on crypto mining and Tesla’s partial distancing from the digital asset due to environmental concerns.
Bitcoin dominance previously approached 50% in June 2022, as the entire crypto market suffered due to news of persistently high inflation in the United States, leading to aggressive monetary tightening by the Federal Reserve. Although Bitcoin’s value fell significantly at that time, cryptocurrencies like Ethereum (ETH) experienced even sharper declines. The ETH/BTC pair plunged to a ratio of just 0.05.
This month, a similar decline occurred as ETH/BTC fell from 0.07 on June 6 to 0.064 at the time of writing. Top altcoins, including Cardano (ADA), Solana (SOL), and Polygon(MATIC), also suffered substantially more compared to Bitcoin, following a US regulator’s lawsuit against Coinbase, alleging that these coins are unregistered securities. In contrast, SEC chairman Gary Gensler has reiterated his view that Bitcoin is a commodity.
Additionally, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance, labeling its native token BNB as a security. BNB, the fourth largest cryptocurrency by market cap, has plummeted 20% since the start of the month.
The Bitcoin dominance metric has long been criticized for underestimating Bitcoin’s true market share by considering stablecoins in its calculations. However, even the stablecoin market has retreated this year, as Paxos was forced by the SEC to begin winding down BUSD in February, removing billions of dollars in tokens from circulation.
MicroStrategy’s executive chairman Michael Saylor recently predicted that Bitcoin dominance will climb above 80% as regulators continue to scrutinize other digital assets. He suggests that regulatory clarity will drive Bitcoin adoption by reducing confusion and anxiety, thereby attracting more institutional investors to the crypto market.
Bitcoin’s price has risen 6% since last week after BlackRock filed for a Bitcoin Spot ETF, an application that investors hope may receive unique approval from the SEC. As the crypto industry evolves and adoption continues to increase, it appears that Bitcoin’s dominance remains a critical factor in determining the future landscape of digital assets.
Source: Decrypt
