Bitcoin's dominance in the crypto market has surged to a three-year high. This comes as the wider market faces turbulence.
Data from Coinglass shows Bitcoin's market share at 55.6989%. It's the highest since April 2021.
The total crypto market cap then was $1.09 trillion. Now it's $1.2 trillion.
Market conditions have changed significantly since 2021. Ruslan Lienkha from YouHodler says today's market is "much more transparent and liquid".
He notes increased trading volume and less price manipulation. Back in 2021, new investors entered through Bitcoin. "This year's main driver of Bitcoin's dominance is the rise of ETFs," Lienkha explains. These make Bitcoin accessible to traditional investors.
They're drawn to its "unique status as a highly decentralized asset". This feature is hard to replicate in other projects.
Jake Ostrovskis from Wintermute calls it a "flight to safety". Investors are turning to Bitcoin, ditching riskier altcoins. Lienkha points to a "segmentation of the crypto market". Bitcoin and Ethereum are cozying up to traditional finance.
Meanwhile, meme coins are creating their own niche. These attract traders less interested in established cryptos.
Ostrovskis notes increased institutional presence. This exposes crypto to "macroeconomic factors and regulatory developments".
Altcoins might struggle in this environment. They lack the "same level of institutional backing and stability" as Bitcoin and Ether.
Bitcoin's dominance comes amid market turmoil. Crypto prices have taken a hit, with Bitcoin dipping below $50,000 on Monday. It's a perfect storm of factors. Interest rate wobbles and Middle East tensions are spooking investors.
The U.S. presidential race is adding to the mix. Trump's polling numbers are slipping as Kamala Harris gains ground. Trump's pro-crypto stance has won him support from crypto bigwigs. Harris is trying to mend fences with the industry.
But her efforts might be "a tad late", according to Bernstein Research. The current administration's "war on crypto" has left its mark.
In this uncertain climate, Bitcoin's standing as the OG crypto is paying off. It's weathering the storm better than its younger rivals.