Bitcoin has asserted dominance with a rising market share of 60%. This has run concurrently to a flatline in the growth of altcoins. We discuss the price changes in the following article.
Like most years, cryptocurrencies have been volatile in 2024. Yet Bitcoin has risen to assert its superiority, taking well over half of the market’s value. At its highest level since April, could Bitcoin be due to a bull run that will kill off its rivals? We dive into Bitcoin’s push for a new high and the crown of cryptocurrency in the following text.
A New Market Share
When Bitcoin has increased its market share in the past, it has typically done so at the expense of altcoins. Bitcoin rose by 2.5% on markets this week and in historical fashion, many altcoins dropped in value.
Altcoins are alternative coins, being any cryptocurrency that is not Bitcoin. They are created on differing blockchains and though they have similar uses to Bitcoin, they often have different features. Some provide faster transactions, while others have smart contracts and prioritize privacy for financial transactions. For example, XRP is an altcoin that has specifically been designed for the transfer of money across borders.
One of the first major currencies to drop when Bitcoin asserts dominance is Ethereum. You can see on a Bitcoin chart where it has risen. Contrast this to one plotting Ethereum and you can see how Ether has devalued. The ether to Bitcoin ratio over the last few days, shows they are at their lowest levels since April 2021. This puts Bitcoin in the most dominant spot it has been in 3.5 years.
Mass Investment in Bitcoin ETFs
The price has been helped by a few different factors. The past few days saw a rapid wave of inflows into Bitcoin ETFs. This amounted to $371 million on October 15th alone, reaching $1.1 billion over a three-day period.
Exchange-traded funds are a basket of commodities investors can buy into. In this case, they buy into the company that owns the Bitcoin. They are seen as a more stable way for investors to join the volatile cryptocurrency economy. Introduced early this year, Bitcoin ETFs have fared quite well, with only two major outpourings over the year. There are 11 spot Bitcoin traded ETFs in the US.
The U.S. Treasury yield curve has also helped to push up the price of Bitcoin. This is a visual representation of interest rates on US Treasury Debt. It can be used to predict changes in output and growth or make investment decisions based on bond rates. A stronger-than-expected result from CPI data has made the currency more attractive to investors as well. The consumer price index (CPI) is used to measure the average change of prices over time by consumers.
The US data was worse than expected which had some results on the price of Bitcoin. Generally, when interest rates are high people will move toward less risky and volatile assets. When rates are low, they will move towards riskier investments like cryptocurrencies, buoying the price.
This signals that Bitcoin is increasingly becoming viewed as a less risky asset. This may be down to ETFs or their general length of time on digital markets. Altcoins, viewed as more volatile, have slipped somewhat. This has increased the dominance of Bitcoin.
Three-Line Break Chart
Others are predicting that a record high of $73,000 is on track for Bitcoin. While candlestick charts do not bring any exciting data to the forefront, data provided by what is known as a three-line break chart is much better. It looks at trends and price movement excluding data on time. When the price moves against previous green lines it shows that a rally is possible and this is what they have done.
However, investors should be careful. Bull runs have all stalled at $70,000 since March of this year. Failed breakouts can also lead to even bigger slides.
There are differing views on this peak. Some believe the dominance will peak at 60%. Others have said that the cycle has already peaked and that meme coins and other altcoins are set to take their place not if, but when a crash takes place.
Investors should also be wary that a psychological barrier is on the way for Bitcoin. The $69,000 high it had three years ago was held for around three years. If it breaks this, then instead of a further rally it could signal another period of stagnation. This may cause those looking for short-term gains to look elsewhere, in essence, altcoins, and meme coins.
There are two outcomes. Bitcoin continues to assert dominance. In this case, now is the best time to buy. The second is that it does crash. This will see a rise in the use of altcoins, particularly those with practical blockchain uses. Now may be the time to look at some of the best ones such as Ethereum, Solana, or XRP.
