The recent rise in the price of the main cryptocurrency has been accompanied by the increase in its capitalization and now, Bitcoin is increasing its dominance in this field. Historically, the currency created by Satoshi Nakamoto, has been the absolute queen in this index.
Although it is not the widest margin of dominance that it has had in its history over the rest of the cryptocurrencies, it is increasing. If you compare it with the numbers from the beginning of the year, you can see how the percentage had dropped considerably.
Consequently, on May 10, Bitcoin occupied 67.11% of the entire capitalization of the crypto environment. From that moment, it began to slide until it reached the lowest point of this 2020, which was on September 13, standing at 56.67%.
Bitcoin increases its dominance, but it will not be the same as before
The fact that Bitcoin is the one who has dominated and dominates in a solid way in market capitalization, does not mean that it has not waned. In this sense, in the same way that the general trend of its price is upward, its dominance is, on the contrary, downward or at least that seems to indicate the behavior.
For example, in June 2013, it was only competing in this field with Litecoin. By then, Bitcoin’s dominance in capitalization was almost absolute, at 94.62% versus 4.88% for Litecoin.
With the rise of altcoins, the vast majority of them were not successful, but there were others that did and that are still solidly in the fight. These are precisely the ones that have contributed to the decline in Bitcoin’s dominance percentage.
It can be said that the current movement of increasing the dominance of Bitcoin, in terms of capitalization, is but a small recovery. An important fact to take into account is that, although the percentage domain is reduced, the equivalent amount in USD increases quantitatively.
Rivals gain ground
If you look at the percentages of digital currencies that rival Bitcoin in capitalization individually, in isolation none of them seem important. In fact, the cryptocurrency that comes closest to Bitcoin, in percentage terms, is Ethereum, which, at the time of writing, accounts for 11.85%.
Another noteworthy case is Tether. This stablecoin has risen in an overwhelming way in this area, until it is placed behind Ethereum. Some analysts believe that, given this momentum, by next 2021, the former will unseat Ethereum from the second position it has held solidly since 2016.
It should be noted that Tether ranks first among stablecoins. This category of currency, as its name implies, has a stable price anchored to some fiat currency such as USD or EUR, or to some natural resource or asset. Despite this, the aforementioned stablecoin is very far from reaching the dominance of Bitcoin.
Ripple’s XRP cryptocurrency is another one that handles a significant percentage of capitalization, with 3.04%. Other coins, which can be classified as important, are Bitcoin Cash, Chainlink and Binance Coin, which cover 1.28%, 1.17% and 1.05% in the same respective order.
The strength is in the joining
After seeing the very low indexes of the rivals in capitalization, the question arises, Why is Bitcoin losing grip on dominance? The answer to this is in quantity.
To date, there are about 7,200 different cryptocurrencies, according to CoinMarketCap. The sum of the market capitalization of all these projects, yields a capitalization percentage of 15.32%. With this, the capitalization figure in which Bitcoin dominates makes more sense.
Although the recent boom of Bitcoin, motivated by PayPal’s announcement to operate with cryptocurrencies, could allow the gap to widen a bit, everything seems to indicate that the other currencies will continue to recover their distance.
However, there is the possibility of a Bitcoin bullish, which allows it to consolidate at very high prices. This would consolidate a new takeoff in the dominance percentage. For now, we just have to wait.
Data to take into consideration
- Bitcoin increases its dominance in terms of capitalization percentage. It currently stands at 58.97%.
- The widening of the capitalization percentage indicates that Bitcoin appears to be recovering slowly but continuously.
- In amount, the capitalization of Bitcoin, equivalent in US dollars, is $ 240 billion, of the total $ 396 billion of the crypto ecosystem.
- The lowest percentage of the year was on September 13, when Bitcoin occupied 56.67%. The highest on May 10, when it reached 67.11%.