Bitcoin Dominance Hits 64.89% As Price Surges 10.9% Below All-Time High
2min read Bitcoin's dominance in the cryptocurrency market reached 64.89% today, marking its highest level since January 2021. This surge coincided with the price of Bitcoin topping $97,000 on Friday morning. The dominance metric, which measures Bitcoin's capitalization as a percentage of the entire market's cap, has risen from around 57.90% at the start of the year.
In early December, Bitcoin's dominance had dropped to 55% as the euphoria following Donald Trump’s election victory pushed altcoin prices to new highs. However, this positive sentiment shifted to fear and uncertainty when the Trump administration began imposing and ramping up tariffs in February and March, which dampened investor appetite for altcoins. While Bitcoin itself was affected by the tariff fallout, recent exemptions and compromises from the Trump administration have boosted the cryptocurrency, without inviting a full recovery for many major alts.
Bitcoin's Friday surge to $97,000 puts it just 10.9% below its all-time high of $108,786 set in January. In contrast, altcoins like Ethereum, Solana, and Dogecoin are down 54%, 43%, and 61% respectively from their highs set in either December or January. At the time of publication, Bitcoin had retraced slightly to $96,947, up 0.7% on the day.
David Morrison, a Senior Market Analyst, attributes Bitcoin's outperformance to several factors, including its first-mover advantage and high acceptance relative to its peers. He notes that Bitcoin's relatively friendly regulatory environment, which is expected to improve further under the current administration, contributes to its attractiveness. Additionally, Bitcoin's supply is strictly limited, making it an attractive investment for both retail and institutional investors, even during bearish periods.
Morrison also highlights Bitcoin's resilience during recent market turbulence, noting that investors can see a history of bounce-backs following large pullbacks. This resilience is likely to help Bitcoin increase its market cap dominance as long as tariffs weigh down the U.S. and global economy.
Bitcoin's position has also been bolstered by investor flight from U.S. treasuries and other U.S.-based assets. Bitcoin ETF flows have outstripped flows for gold ETFs by $4 billion this week, indicating strong institutional demand. Morrison suggests that if Bitcoin's price rises further and breaks above 70%, its market dominance could increase significantly. However, he also notes that a few altcoins may benefit due to their specific uses.
Should the U.S. manage to broker a satisfactory resolution or trade deal with China and the rest of the world, the macroeconomic picture could improve. This could lead to a more bullish cryptocurrency market, potentially reducing Bitcoin's dominance over time. Morrison points out that rising risk appetite typically leads investors to expand their horizons beyond Bitcoin, creating opportunities for more speculative coins to outperform Bitcoin in percentage gains.
