As The Crypto Race Heats Up: Noted That The Bitcoin's Dominance Ratio Has Dropped To Lowest Level In 12 Months

The Dominance Ratio Of Bitcoin

Bitcoin has lost a significant share of market dominance during the last few weeks despite being the largest digital asset by market capitalisation as the dominance ratio dropped to 61.5% on Thursday and it was found after hovering for around 66% for many of the months on end. It was over 12 months ago on June 30, 2019, that it was the last time the crypto asset’s dominance level was around the 61% range. 

Having the largest market valuation out of all the digital assets in existence, Bitcoin has a market cap as of today around $175 billion out of the grand total of $ 284 billion representing the overall worth of all 5,700+ crypto assets. 

Compared to the aggregate market cap of all other coins, people refer to the Bitcoin Dominance Index referring to BTC’s market cap. From 2009 up until March 2017, the BTC’s dominance level interestingly stayed consistently above the 77% ratio. During those six years and most of the time, BTC’s dominance ratio came to be between 80-90% on average. 

Hereby in 2017, then things have certainly changed as BTC touched an all-time high of $ 19,600 per coin with the dominance continuing to drop like a rock. Furthermore, BTC’s market dominance in June 2017 was only 37% but regained some of the uptrend capitalisation throughout the latter half of 2017 and into 2018. 

Why Is Competitors Faring Well?

On January 14, 2018, it was noted that bitcoin’s dominance index fell to an all-time low of 32%, and once again BTC has been able to regain some of the capitalisation losses in comparison to the rest of the crypto economy. BTC during the last year has steadily kept the BDI above the 65% range whereas, on February 23, 2020, it dropped to 62% for a very short time.

The cryptocurrency proponents are discussing the subject with great fervor as the BTC is below that range again and commenting on a forum post about the situation, one Redditor from r/cryptocurrency said Altseason is imminent. Here the term used altseason or altcoin season refers to a period of time where alternative digital assets besides bitcoin and seeing the market cap increase significantly by undermining BTC’s overall BDI metric. 

Altcoin season had indeed happened in the summer of 2017 as the BTC’s dominance index crashed down to the 37% zone with many speculators assuming that BTC prices grow bullish once again as also expecting an altcoin season preceding the ostensible pending bull run. 

The Current Position Of Bitcoin 

BTC’s dominance index level at 61.5% today on July 23, 2020, indicates that few high-profile digital coins are seen gathering bigger gains, as the biggest crypto asset market valuation that is chomping away at the dominance of BTC is Ethereum as it captures close to 10% of the overall $ 285 billion crypto coin market cap. 

Being a strong contender against BTC’s market dominance was XRP in the past whereas the case isn’t that so much anymore. While it is true that XRP comes to have a touch over 3% of the entire crypto-coin valuation but tether is larger today. The ecosystem of the stablecoin tether has been nipping at bitcoin’s heels as of late as it managed to become the third-largest market valuation 

It is yet not appreciated by Bitcoin maximalist that the Ethereum’s defi boom is bringing fierce competition to the first cryptocurrency’s dominance levels as the Blockstream representative Grubles criticised the Ethereum project after ETH seeing significant gains on Wednesday.

Grubles then tweeted that knowing that it wouldn’t scale while they marketed Ethereum, as the Ethereum people did it so as the world computer, is he taking crazy pills, or is it just straight-up fraud?  

Responding to Gruble’s take on Ethereum, was in response the popular Twitter account @degenspartan where Degen Spartan was poking fun at Gruble’s tweet saying that they need higher ETH/BTC ratio making the takes like this and Blockchair founder Nikita Zhavoronkov also rubbed it in on July 23 tweeting, sorry Bitcoin maxis, but the flippening is now in full force. 

To Sum Up…

Today it was observed that as Bitcoin is up 1.6%, ETH spiked over 8% during the last 24 hours. During the last week, BTC is up a touch over 4% as ETH gained 13% in seven days. ETH is wiping the floor with BTC’s three-month gains as the 90-day stats show and ETH is up over 41% compared to BTC’s 26%. 

BTC is still down 2% for the last 12 months of trading prices, against the US dollar whereas ETH gained 22% in the last year. Nipping away at Bitcoin’s dominance levels are several other altcoins like the ADA, LINK, and CRO, seeing significant gains between 119-238% during the last 12 months.