Unlike 2021, when altcoins like Ethereum recorded significant gains, today’s picture of the crypto market is significantly different. Bitcoin‘s dominance recently surpassed 60 percent, the highest level since 2021, but this time, its significance is even greater due to the explosive growth of the number of cryptocurrencies and the weakening of the once-leading altcoins.
The industry was relatively small four years ago, with about 3,000 to 4,000 active projects. It is estimated that several million cryptocurrencies exist today, making Bitcoin’s dominance even more influential. Although Bitcoin’s market share is similar to before, the overall size of the industry now means that Bitcoin takes up a far larger slice of a much larger market pie.
Bitcoin Resilience
Recently, Bitcoin has shown resilience through price volatility, confirming its leadership position. After falling to a five-month low just above $74,000, the price rebounded above $85,000, boosted by positive economic news from the US and political events, such as the suspension of tariffs between the US and global partners. Despite the short-term resistance at $86,000, Bitcoin continues its upward trend, and its market dominance further reinforces the impact of these movements.
Unlike 2021, altcoins are under pressure now. The ETH/BTC trading pair fell to 0.019, the lowest level since January 2020, indicating a decline in Ethereum’s relative strength against Bitcoin. Other altcoins also recorded a decrease in market share without significant recovery.
Predictions of Bitcoin’s continued dominance
Arthur Hayes, co-founder of BitMEX, predicts that Bitcoin’s dominance could grow to 70 percent, supported by increasing accumulation by large investors. Hayes believes that the growing dominance results from Bitcoin’s appeal as a hedge against inflation, especially in the context of possible changes in US monetary policy, such as lower interest rates and increased money printing.
In such an environment, Bitcoin is increasingly perceived as a safe store of value, strengthening its leading position in the market.
When can we expect the altcoin season?
Well-known crypto analyst Rekt Capital estimates that the long-awaited altcoin season could begin when Bitcoin’s dominance reaches 71 percent. Historical patterns show that when Bitcoin’s market share reaches that threshold and begins to decline, altcoins typically experience a surge in value and activity. If history repeats itself, Bitcoin’s current dominance could usher in a new phase of the market, in which altcoins could regain some of their lost market share.