What is Bitcoin Dominance?

Bitcoin dominance is a key metric in the cryptocurrency market, representing the percentage of the total market cap held by Bitcoin. It offers insights into Bitcoin's strength, market trends, investor sentiment, and the overall health of the crypto ecosystem.

Manage your Bitcoin and crypto securely with the self-custody Bitcoin.com Wallet app.

Bitcoin Dominance: Understanding BTC's Market Power and Influence

Bitcoin dominance is a crucial metric in the cryptocurrency market. It measures Bitcoin's market capitalization relative to the total market capitalization of all cryptocurrencies, providing valuable insights into Bitcoin's strength, market trends, and investor sentiment.

Get started with a quick introduction to Bitcoin. Dive deeper into what Bitcoin is and explore its origin story-from an idea to a global financial revolution. Also, explore the broader cryptocurrency landscape.

What is Bitcoin Dominance?

Bitcoin dominance represents the percentage of the total cryptocurrency market capitalization held by Bitcoin. A higher dominance suggests Bitcoin holds a larger share of the market, indicating its relative strength. Conversely, a lower dominance indicates a larger share held by altcoins.

Understand altcoins and the Bitcoin vs. Altcoin comparison.

How is Bitcoin Dominance Calculated?

Bitcoin dominance is calculated using the following formula:

Bitcoin Dominance = (Bitcoin Market Cap / Total Crypto Market Cap) * 100

Bitcoin Market Cap: The total value of all circulating Bitcoins (Bitcoin Price * Circulating Supply).
Total Crypto Market Cap: The combined market cap of all cryptocurrencies.

Example: If Bitcoin's market cap is $500 billion and the total crypto market cap is $1 trillion, Bitcoin dominance is 50%. Real-time data is available on sites like CoinMarketCap and TradingView.

Why is Bitcoin Dominance Important?

Bitcoin dominance offers key insights for traders and investors:

Market Sentiment: Rising dominance suggests a preference for Bitcoin over altcoins, possibly indicating a "risk-off" sentiment. Falling dominance may signal increased interest in altcoins and a "risk-on" environment. Learn about market volatility.
Altcoin Price Correlation: Bitcoin dominance often has an inverse relationship with altcoin prices. When dominance falls, altcoins may rise, and vice versa. Explore Bitcoin price predictions.
Portfolio Management: Investors use dominance to adjust their crypto holdings. Rising dominance might lead to increased Bitcoin allocation, while falling dominance could prompt diversification into altcoins. Learn about Bitcoin wallets, how to create one, and how to choose the right one.
Market Cycles: Dominance can reflect broader market cycles. During bull markets, altcoins often outperform Bitcoin, lowering dominance. In bear markets, Bitcoin tends to hold value better, increasing dominance. Bitcoin's maturity and adoption also play a role. A declining dominance over time could signal the maturation of the altcoin market. Explore Bitcoin as an asset and understand the dynamics of a bull market vs. bear market, including how market trends impact Bitcoin’s price and investor sentiment.

Bitcoin Dominance and Altcoin Prices

The inverse relationship between Bitcoin dominance and altcoin prices is influenced by:

Market Sentiment: Bullish sentiment often leads to investment in higher-growth altcoins, reducing Bitcoin dominance. Bearish periods may see funds move back to Bitcoin, increasing dominance and impacting altcoin prices. Learn more about Bitcoin as a store of value.
Liquidity Flows: Bitcoin's high liquidity means initial inflows into the crypto market often go to Bitcoin first, potentially increasing dominance before flowing into altcoins.
Trading Pairs: Many altcoins are traded against Bitcoin. Bitcoin price rises can create selling pressure on altcoins as traders take profits in BTC. Learn about exchanges and decentralized exchanges (DEXs).

Future of Bitcoin Dominance

Factors influencing future Bitcoin dominance include:

Altcoin Innovation: New technologies and use cases in DeFi and NFTs could attract investment, potentially lowering Bitcoin's dominance.
Bitcoin's Development: Scalability improvements and new features could strengthen Bitcoin's position. Learn about Bitcoin's layer-2 solutions and the Lightning Network.
Regulation and Institutional Adoption: Government regulations and institutional investment could impact both Bitcoin and altcoins, influencing dominance. Understand Bitcoin governance and explore Bitcoin corporate treasuries.
Macroeconomic Factors: Global economic conditions and market sentiment can influence capital flow between Bitcoin and altcoins. Learn about inflation and Bitcoin as an inflation hedge.

Conclusion

Bitcoin dominance is a crucial metric for analyzing the cryptocurrency market. By tracking its trends, understanding its relationship with altcoin prices, and considering the key factors that influence it, investors can gain valuable insights into market cycles and sentiment. Using Bitcoin dominance as part of a broader investment strategy can help in making informed decisions in the ever-evolving crypto landscape.

Discover the top platforms for buying, selling, and trading cryptocurrencies

Algorithmic Trading

Automated Trading

Arbitrage Bots

Copy Trading

Day Trading

Demo Trading Accounts

Derivatives

Anonymous Exchanges

Centralized

Cryptocurrency Brokers

Crypto To Fiat Exchanges

Decentralized

For Beginners

Hybrid Exchanges

Lending Platforms

Lowest Fees

P2P Crypto Exchanges

Paypal Deposit

Safest Exchanges

Savings Accounts

Swap Platforms

Best Crypto to Buy Now

Best Crypto Presales

New Crypto Projects

Leverage Trading

Binary Options

Futures Trading

Margin Trading

Options Trading

Shorting

Contract Trading

Perpetual Futures Trading

Discover the top platforms for buying, selling, and trading cryptocurrencies

Explore Crypto Platforms

Looking to dive deeper into decentralized and centralized exchanges, automated trading tools, or beginner-friendly platforms? Explore these curated platform guides from Bitcoin.com:

Decentralized Exchanges & DEX Tools

Centralized & Hybrid Exchanges

Automated, Copy & Algorithmic Trading

Futures, Margin & Derivatives

Passive Income & Savings

Beginner & Special Use Platforms

Related guides

Start from here →

What is Bitcoin?

Get a straightforward introduction to Bitcoin and why it matters.

Read this article →

What is Bitcoin?

Get a straightforward introduction to Bitcoin and why it matters.

A quick intro to Bitcoin

Get a straightforward introduction to Bitcoin and why it matters.

Read this article →

A quick intro to Bitcoin

Get a straightforward introduction to Bitcoin and why it matters.

Bitcoin vs. Altcoins

Bitcoin vs. Altcoins: A comparative analysis for cryptocurrency investors.

Read this article →

Bitcoin vs. Altcoins

Bitcoin vs. Altcoins: A comparative analysis for cryptocurrency investors.

What are Altcoins?

Altcoins are cryptocurrencies beyond Bitcoin. Learn about their diverse functionalities, use cases, risks, and potential.

Read this article →

What are Altcoins?

Altcoins are cryptocurrencies beyond Bitcoin. Learn about their diverse functionalities, use cases, risks, and potential.

How does Bitcoin compare to other asset classes?

Find out how Bitcoin has performed as an asset class vs. others.

Read this article →

How does Bitcoin compare to other asset classes?

Find out how Bitcoin has performed as an asset class vs. others.

Bitcoin Price Prediction

A deep dive into Bitcoin price prediction, considering historical trends, market cycles, and future potential. Understand the factors that drive Bitcoin's value and learn strategies for managing risk.

Read this article →

Top Casino Platforms

Exchange Types

Best Trading Platforms

Top Betting Platforms

Best Wallets

Best Crypto Cards

Featured Pages

Top Casino Games

Crypto Venture Network

Wealth Management

Wallets by Crypto

Other Cards

Casino Guides

Casinos by Crypto

More Slots

Automated Trading

Trading Guides

Tennis Betting

Derivatives Trading

Esports Betting

More Games

Other Exchanges

Other Wallets

Gambling

Sportsbooks

What is Bitcoin Dominance?

Table of Contents

Bitcoin Dominance: Understanding BTC's Market Power and Influence

What is Bitcoin Dominance?

How is Bitcoin Dominance Calculated?

Why is Bitcoin Dominance Important?

Bitcoin Dominance and Altcoin Prices

Future of Bitcoin Dominance

Conclusion

Trading Features

Cryptocurrencies

Exchange Types

Geographic Regions

Investment Options

Leverage Trading

Trading Features

Cryptocurrencies

Exchange Types

Geographic Regions

Investment Options

Leverage Trading

Trading Features

Cryptocurrencies

Exchange Types

Geographic Regions

Investment Options

Leverage Trading

Explore Crypto Platforms

Decentralized Exchanges & DEX Tools

Centralized & Hybrid Exchanges

Automated, Copy & Algorithmic Trading

Futures, Margin & Derivatives

Passive Income & Savings

Beginner & Special Use Platforms

Related guides

What is Bitcoin?

What is Bitcoin?

A quick intro to Bitcoin

A quick intro to Bitcoin

Bitcoin vs. Altcoins

Bitcoin vs. Altcoins

What are Altcoins?

What are Altcoins?

How does Bitcoin compare to other asset classes?

How does Bitcoin compare to other asset classes?

Bitcoin Price Prediction

Bitcoin Price Prediction

STAY AHEAD IN CRYPTO

Start investing safely with the Bitcoin.com Wallet

Download App

Company

Educate

Products & Services

Bitcoin Data

Get Crypto