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Bitcoin's Dominance Challenged as Altcoins Shine Amid Market Uncertainty

Coin WorldWednesday, Feb 19, 2025 2:35 am ET

1min read

Bitcoin and Ethereum have experienced a decline in value, while Solana and XRP have seen gains, raising questions about a potential shift in market sentiment. Bitcoin, which had previously defied tariff threats from former U.S. President Donald Trump, lost $430 million in value as major U.S. Bitcoin ETFs, including Fidelity, Ark 21Shares, and Grayscale, saw significant withdrawals. This sell-off has led some to wonder if Bitcoin's dominance is waning, allowing altcoins to shine.

According to CoinShares, digital asset funds saw $415 million in outflows last week, with Bitcoin taking the biggest hit at $430 million. Ethereum, on the other hand, saw modest outflows of $7.2 million but still maintained a net inflow of $785 million for the month. Meanwhile, Solana and XRP broke the trend, pulling in $8.9 million and $8.5 million, respectively, as institutional interest in high-cap altcoins continues to grow.

James Butterfill, Head of Research at CoinShares, attributed the outflows to concerns over U.S. monetary policy and higher-than-expected inflation data. Additionally, factors such as Trump's reciprocal tariffs, a strengthening dollar, and rising gold prices are contributing to the Federal Reserve's hawkish stance on rate cuts. This macro uncertainty could further impact the cryptocurrency market in the coming months.

Bitcoin's dominance (BTC.D) has slipped below 61% as investors have flocked to alternative cryptocurrencies. With Solana and XRP riding the ETF wave and backed by strong communities and real use cases, BTC.D could face serious competition. The response of Bitcoin and high-cap altcoins like Solana and XRP to these market conditions will be crucial in determining the future of cryptocurrency dominance.

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