Bitcoin influence has declined sharply

Bitcoin’s (BTC) dominance in the crypto market has fallen to the psychological mark of 40%. This reflects the declining influence of the first cryptocurrency on other coins.

The market dominance of a cryptocurrency is determined by the ratio between its market capitalization ($905.27 billion for Bitcoin) and the total market capitalization of the entire cryptocurrency ($2.24 trillion). Since the beginning of the year, this indicator for bitcoin has gradually decreased.

Bitcoin’s dominance has declined

According to TradingView, bitcoin’s dominance has declined from 69% to 40% over the past year and is close to a historic low of 37%. As of Dec. 29, the top 10 most influential assets include:

Bitcoin – 40.12%;

Ethreum – 19.96%;

Binance Coin – 3.9%;

Tether, 3.45%;

Solana, 2.4%;

HEX – 2.4%;

Cardano, 2.11%;

USD Coin, 1.86%;

XRP – 1.77%;

Polkadot – 1.25%.

The fall of bitcoin’s share in the total capitalization of cryptocurrencies can’t prevent even the fact that since the beginning of the year, the value of the first cryptocurrency increased by 64% (at the same time, during the last month it decreased by 16%). According to cryptocurrency exchanges, a single BTC is trading at $47,900 as of December 29.

Against this background, on the TradingPlatforms website there were published the results of a study, according to which the dominance of altcoins in the market has tripled over the last 7 years – from 21% to almost 60%. This may signal the approaching “altcoin season”.

“Altcoin season” has been going for a year

At the same time, crypto analyst Altcoin Sherpa said on Twitter that “altcoin season” has been going on for a year. He cited a chart with the downward trend of bitcoin’s dominance as confirmation.

At the same time, he drew attention to the seasonality of the level of BTC dominance. According to the expert, every winter (except 2021) the first cryptocurrency systematically loses its influence, gaining it by summer.

However, he explains the decline of this indicator in general by the growing popularity of cryptocurrencies that are used in the DeFi and NFT sector (including auctions and games), for the meta universe, as well as L1-operations (i.e., the first level). These are tokens such as Solana, Axie Infinity, The Sandbox and Terra.

Recall that 90% of all bitcoins were mined in December 2021. That is 18.89 million of the 21 million maximum issue.