Bitcoin dominance, which refers to BTC’s share of the total market capitalization of all cryptocurrencies, may not be as informative as it seems. This metric is largely influenced by the trading activity between Bitcoin and Ether (ETH), the second-largest cryptocurrency. Major shifts in the ETH/BTC trading pair can distort the perceived dominance of Bitcoin. Additionally, the role of stablecoins like Tether (USDT) adds complexity to the interpretation of Bitcoin’s dominance. The increasing market cap of stablecoins does not necessarily reflect an investment in cryptocurrencies but rather the preparedness of investors to engage or hedge their crypto exposure. The dominance chart may not be the definitive metric for understanding Bitcoin’s position in the market, and a more nuanced approach is needed to encompass the multifaceted nature of cryptocurrency investments and movements.
