The dominance of altcoins continues to grow at the expense of Bitcoin’s market share.
Bitcoin’s dominance in decline
During the course of 2021, Bitcoin’s dominance of the entire cryptocurrency market capitalization fell from 70% to 38%, nearly halving.
Then that of altcoins rose from 30% to 62%, i.e., it more than doubled in the space of a year.
Actually, the lowest peak of 2021 in Bitcoin’s dominance (37%) was recorded on May 19, when the price of BTC was falling sharply after instead strong increases in altcoins. But the current level is only slightly higher.
However, this is not the lowest peak ever.
In fact, on January 14, 2018, when Bitcoin’s price had been falling for almost a month while the last big altcoin bubble had just started to deflate, its dominance touched 32% but then rose again to 45% in less than three months.
Over the next few years, Bitcoin’s dominance continued to grow until January of this year, when it touched 71%.
A comparison with 2017
Note that 2017 also saw a somewhat similar path.
BTC’s dominance began the year at 87% and then plummeted over the months to an all-time low of 32% during the great altcoin bubble of January 2018.
Despite a similar path in some ways, it is the extremes that are different.
In 2017 the decline started at 87% and ended at 32%, while in 2021, the decline started at 70% and as of yet has not dropped below 37%.
Also, starting in mid-2019 for a year and a half, Bitcoin’s dominance returned to well above 50%, although it never returned above 80% share.
So, on the one hand, during 2021, the dominance of altcoins strengthened significantly, while on the other hand, Bitcoin’s dominance after the 2017 crash never returned to previous levels.
Altcoin rally: from dominance to number of tokens
However, it should be pointed out that before 2017 there were very few altcoins, and among them, the weight of stablecoins on the overall market cap was minimal.
But now, there are more than 10,000 altcoins, with two stablecoins in the top ten by market capitalization and three in the top 15. Adding up the market cap of these three stablecoins (USDT, USDC, and BUSD), we arrive at 5.5% of the market, a dominance lower only compared to that of BTC and ETH.
In other words, in 2021, there was a real altcoin rally that led them to subtract a significant portion of dominance from Bitcoin, i.e., more or less the same as it happened in 2017. Therefore, BTC’s loss of dominance could also be only temporary and could be recovered, in part, in 2022.