The Cryptocurrency Race Heats up as Bitcoin Dominance Drops 30%

The Cryptocurrency Race Heats up as Bitcoin Dominance Drops 30%

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Bitcoin’s price has been rising steadily throughout 2016 and Q1 of 2017 amassing a record market capitalization of $25.5 billion USD. However, many other cryptocurrency markets are growing in value and bitcoin has lost more than 30 percent of its market share over the past four months.

Also read: Why Serious Investors Need Bitcoin in Their Portfolios

Bitcoin Dominance Falls to an All-Time Low

For a very long time, bitcoin’s market capitalization (market cap) was considerably larger than all the other altcoins in existence. A market cap is the total market value of all bitcoins across all major exchanges at a specific point in time. Capitalization analysis is often used as a statistic that roughly shows a particular markets net worth. Since bitcoin’s initial value began and other altcoin price indexes emerged, bitcoin commanded 80-90 percent of market cap dominance. Now bitcoin dominance compared to other altcoin market shares has dropped to an all-time low of 53 percent.

The Cryptocurrency Race Heats up as Bitcoin Dominance Drops 30%
BTC Dominance for May 7, 2017, according to Coinmarketcap.com.

During the first month of 2017 bitcoin dominance was roughly 87 percent and subsequently began to decline during the following months. Alternative cryptocurrencies such as Ethereum, Dash, Litecoin, Ripple, Monero, and others have all seen significant price spikes over the past four months. For instance, in January one ether (ETH) was worth $8 per token, and the currency had a market cap of $722 million. Now one ETH is roughly $96, and Ethereum is holding a $8.8 billion dollar market capitalization. Increases like this have been seen with numerous altcoins, and right now four cryptocurrency markets now capture over a billion in fiat value or more.

The Cryptocurrency Race Heats up as Bitcoin Dominance Drops 30%
In January of 2017 bitcoin’s market dominance was 87%. On May 7, 2017, the digital asset’s dominance dropped to an all-time low of 53%.

‘Deconstructing the Bitcoin Market Cap’

Even though there’s been a decline, some people believe market capitalization isn’t the best method of measuring bitcoin’s value. Civic founder and entrepreneur Vinny Lingham has written a detailed article concerning this subject and believes market caps were designed for stocks and are not constructive for bitcoin’s real valuation. In a post written last spring called “Deconstructing the Bitcoin Market Cap” Lingham states;

“Now, to be absolutely clear, this definition was meant to apply to stocks — not commodities and definitely not digital commodities. Given the comparison is a semi-reasonable proxy for Bitcoin, and it’s widely understood by the financial press.”

There are many others who believe bitcoin’s market cap and share of dominance among other cryptocurrencies should also be taken lightly. Skeptics say that most of the altcoins pumping in value are really only traded on exchanges being pumped one day and dumped a few days or weeks later. People who hold this view believe most altcoins are merely speculative tokens for trading purposes only and have yet to show any real world use.

The Cryptocurrency Race Heats up as Bitcoin Dominance Drops 30%
The digital currency bill paying platform, Living Room of Satoshi, shows a great majority of customers utilize bitcoin over alternative cryptocurrencies.

For instance, as far as real use is concerned, the company Bitwala has stated just recently that not many people are actually using altcoins with their platform. Another example of altcoins lacking real world usage comes from the company the Living Room of Satoshi’s statistics, a startup that allows people to pay bills with cryptocurrencies. According to the company’s charts, right now bitcoin is being used by customers paying bills 88 percent of the time while other altcoins are five percent or less.

‘Losing Sleep Over Ethereum’

Nevertheless, people are still concerned about bitcoin’s market dominance among competitors who are growing in value fast. Even the Economist and Editor in Chief at Adamant Research, Tuur Demeester, recently said he was “losing sleep over Ethereum.”

“With the recent surge in the Ethereum price (ETH reaching 30% of Bitcoin’s market cap at nearly $5 billion), I find myself reassessing a number of my conclusions,” explains Demeester’s April blog post.

To the point where I’m wondering whether it could overtake Bitcoin as the dominant cryptocurrency at some point in the future.

While Others Compare Bitcoin to Concepts That Were Outshined by Competitors, Bitcoin Still Has Significantly Larger Achievements

The Cryptocurrency Race Heats up as Bitcoin Dominance Drops 30%
Bitcoin is often compared to ideas that were outshined by competition and better technology.

Bitcoin’s market dominance of 53 percent is also being discussed heavily across forums and social media. Furthermore, some altcoin communities are placing the blame on bitcoin’s inability to scale and are using the scaling debate to bash the original cryptocurrency negatively. Speculators are comparing bitcoin to ideas that have fallen by the wayside due to better competitors, like Facebook and Myspace, Cassettes to MP3, and VHS to DVD. Mainstream news outlets like the Economist, Bloomberg, Reuters, and others have made similar statements that bitcoin will lose out to competitors.

Bitcoin is still doing exceptionally well during the first four months of 2017, and its value in terms of fiat is higher than ever before. It is still one of the best performing currencies worldwide and continues to make government issued tender look pitiful. It is still the most accepted cryptocurrency, processes more daily transactions, has the biggest hashrate crossing 4,064,444,090 GH/s, and many more achievements well above any other altcoin. So while bitcoin dominance may be low for now, there are a vast amount of other statistics that outshine alternatives.

What do you think about bitcoin’s market dominance now in comparison to last year? Do you think the statistic matters? Let us know in the comments below.


Images via Shutterstock, Pixabay, the Living Room of Satoshi, and Coinmarketcap.com.


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  • Mahesa Suprobo

    There will be room for real world applications for these tokens in the future. Ripple is already being used by banks.

    • Zyo

      Ripple is a centralized system just like Swift or IBAN… probably just more efficient and better structured. It’s not a in the same kind as Bitcoin, Litecoin, Dash or Ethereum.

    • Craig Calabrese

      SURELY ripple will be ahead in bussiness world that slight centralization and control they have is just what the banks want for trust they gave up something peer to peer wise but they certainly gained THE BIG BOYS TRUST that was there plan a bank to bank system world wide

  • Craig Calabrese

    It all starts at BIT Coin and its where it all ends even so You need BTC to buy alts and of course wheres it going the alt profits after the Alts profits are going RIGHT BACK TO BTC so there is room for both i use alts the fast rising ones to make profits in BTC like coffee and cream they go together well THERES ROOM FOR BOTH i think the best alt coins will hang around kinda nice I think it helps bit coin as much as its taking market away
    its always There btc for the way into alts and the way out of alts in the end the main goal back to BTC

  • Craig Calabrese

    RIPPLE has almost too much BANK in them this is going to be same thing as banks now i dont like fact they froze accounts or thats its really centralized system disguised as crypto they just control TOO MUCH too many rules I SEE WHERE THIS IS GOING

  • Craig Calabrese

    ripple with all this success getting the banks on board just has not shown the value you would think and thats because ripple will never be a person to person COIN its a BANK to BANK thing it is a good investment that way but accepted use by REG FOLKS NO!
    its a bank to bank thing investment in that area could pay off

  • Craig Calabrese

    Ripple has one thing a for sure chance of being ahead in the bank game for sure
    for what hurt them in the peer to peer area that centalization and control will get them TRUST in bussiness areas faster than anybody else and was ripples plan from the beginning there not intersted in peer to peer transactions

  • Craig Calabrese

    Hey this block chain tech stuff just sucked me up and down the rabbit hole its JUST so interesting and big almost impossible not get INTERESTED in it and start digging we all got sucked into this exciting Black hole its just so big

  • 叶振东

    In the present, Bitcoin is limited in number, and there is a need for customers to choose other digital currencies that are normal. However, 1, other currencies are based on Bitcoin. 2, is limited to this stage now. 3, in the future, they all need Bitcoin’s guarantee and management of the management committee. 4, which completely reached the purpose of Bitcoin instead of gold reserves. 5, keep in mind that Bitcoin’s credit value is irreplaceable, Bitcoin’s decisive credit value in the two father of Bitcoin. Digital currency, not to overthrow the government, as well as the traditional economic and financial revolution. In the future, digital money is to be accepted by governments and traditional economic and financial. Digital currency will work with them.

  • Marcello

    When you invest you don’t mind the capitalization but only the value of your shares, ounces, cripto coins or tokens. So now bitcoin value is 1600 usd and eth 90. One Bitcoin worths 17 times more than one eth. This is the point, how much worth a single Bitcoin. The rest is short time speculation.

    • Sure it’s NOT the point. The same way you can compare satoshis (instead of whole bitcoins) to eth, and say eth is more attractive. What matters though, is price dynamics, is it growing or plummeting!

      • Marcello

        Ok, what do you mind of capitalization if there are always more tokens? The point is the price of the units.

  • Khurram Javed

    Hopefully, Segwit will get activated on BTC and bring back it’s share lost to altcoins by showing investors that BTC can progress as well.

  • Sunshine1011

    More money is flowing in to other crypto but bitcoin keeps GROWING. They will always be the leader. This article is very misleading.