After a consistent drop in the overall market dominance in the last 11 months, BTC has seen a sharp decline in its crypto market dominance during December’s correction. With a market cap of $930 billion, Bitcoin is still the most valuable digital asset, but now its dominance stands at around 39.8%, which is an enormous decline compared to 70% in December 2020.
Retail and institutional interest in altcoins has played an important role in BTC’s sinking market dominance. Binance Coin (BNB), Cardano (ADA), Solana (SOL), SHIB and DOGE are up substantially this year, compared to Bitcoin’s 70% jump.
Commenting on the latest crypto market correction and the sentiment around Bitcoin, Paolo Ardoino, CTO at Bitfinex, said: “Fear has gripped the digital token space amid speculation that we might still see further falls in the bitcoin price. While the speculative nature of the ecosystem remains front and center in the headspace of many participants, huge leaps have been made in the underlying infrastructure and payment processes."
"The Lightning Network arguably represents DeFi in its truest form. Unlike many of the non-bitcoin chains that often have a speculative component based upon the appreciation of a protocol’s token, the Lightning Network is all about payments and building services,” Ardoino highlighted.
Bitcoin vs Ethereum
In terms of crypto market dominance, Bitcoin and Ethereum present contrasting pictures. While BTC is struggling to maintain its dominance, Ethereum witnessed a massive jump. Additionally, the world’s second most valuable digital asset now accounts for 22% of the overall value of cryptocurrencies. Although, the difference between the market cap of Bitcoin and Ethereum has declined gradually in 2021. Now, Ethereum is $400 billion away from the market capitalization of BTC.
The intensity of the latest crypto market sell-off has dropped in the last few days. “In the closing hours of Tuesday's trading, Bitcoin encouragingly had the largest difference between exchange outflows and inflows since late October. Since Sunday, there has been a net outflow of 40,995 BTC, implying lowering exchange selloff risk,” Santiment highlighted.
