The market share of Bitcoin has reached a two-year high.
On the night of October 21, Bitcoin's share in the crypto market rose to 52.76%, marking the highest level since April 2021, according to TradingView data. The capitalization of the leading cryptocurrency is above the $600 billion mark with a total market capitalization of $1.16 trillion.
Typically, the share of the main digital currency in the overall market capitalization of the entire crypto market increases during cyclical downturns in the industry, while during bullish market periods, when many altcoins are growing at a faster rate than Bitcoin, it decreases. Thus, the so-called "dominance" index of the first cryptocurrency serves as an indicator of the market cycle and investor sentiment.
According to analysts previously surveyed by RBC, the growth of Bitcoin's dominance index in the market is a consequence of the market situation. This occurs approximately every 4 years before Bitcoin's halving and lasts for another six months to a year after it. The current rise in the index indicates that long-term investors prefer to invest in Bitcoin, partially withdrawing funds from altcoins, and partly using the influx of capital predominantly to purchase BTC.
In the first years of the industry's existence, Bitcoin's share in the overall market capitalization of cryptocurrencies was over 80%. In January 2018, at the end of the bullish rally, it dropped to its historical minimum of 35%. Since the collapse of the FTX exchange in November 2022, Bitcoin's dominance has been steadily increasing.
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