Amid the ongoing crypto regulatory uncertainty, Bitcoin’s market dominance has surged to its highest level since July 2021, suggesting a shift in the sentiments of traders and investors towards the world’s pioneer and most substantial cryptocurrency, Bitcoin.
This milestone highlights the current volatility of the crypto market as it continues to grapple with regulatory uncertainty and the various factors that impact Bitcoin’s value.
The Resurgence Of Bitcoin Dominance
The latest data from TradingView reveals that Bitcoin dominance, defined as Bitcoin’s share of the total cryptocurrency market capitalization, has hit a high of 49.5%. This level has not been recorded since July 2021 when Bitcoin’s dominance touched a peak of over 48%.
It is worth noting that earlier this year in April, Bitcoin’s dominance momentarily reached 48.83%, after which it fluctuated within a specific range.
However, the past week saw a notable increase in Bitcoin’s market dominance, correlating with the time when the US Securities and Exchange Commission (SEC) categorized numerous tokens as unregistered securities in its lawsuits against the world’s largest crypto exchanges – Binance and Coinbase.
Consequently, many of these tokens such as Cardano (ADA), Solana (SOL), and Binance Coin (BNB) have experienced significant price drops, while Bitcoin’s value has remained comparatively stable.
Market Influences And The Upcoming BTC Halving
The regulatory actions by the SEC underscore an environment of uncertainty that has had noticeable effects on the crypto market. Amid this backdrop, Bitcoin emerges as a sort of safe haven.
Micheal Saylor, a prominent Bitcoin advocate, echoed these sentiments in a recent interview with Bloomberg, predicting that: “the entire industry is kind of destined to be rationalized down to Bitcoin and a half a dozen to a dozen other proof-of-work tokens.”
Furthermore, anticipation around the upcoming Bitcoin halving event, slated for April or May 2024, could be a contributing factor to Bitcoin’s increasing dominance.
This quadrennial event reduces the reward for mining new Bitcoin blocks by half, effectively slowing the rate at which new Bitcoins are created to manage inflation and maintain their scarcity. The impending halving will result in a block reward decrease from 6.25 bitcoins to 3.125 bitcoins.
Notably, BTC has been in a downward trend in the past week. The largest crypto asset by market capitalization has recorded a bearish movement falling by nearly 5% in the past 7 days. However, over the past 24 hours, BTC has picked up an uptrend, seeing a 2.3% gain in its value.
Bitcoin currently has a market price of $25,515, at the time of writing after initially trading below that price range earlier this week. Meanwhile, Bitcoin’s trading volume has plunged over the past 24 hours from over $15 billion on Thursday to $7.7 billion at the time of writing indicating less trading activity.
Featured image from Unsplash, Chart from TradingView