The Bitcoin price is holding steady above the USD 10,000 mark and is currently showing a sideways movement. This pause for breath offers a lot of room for the Altcoin market, which has broken out further in the last few days. Many Altcoins have been able to make decent profits and have thus automatically reduced Bitcoin’s dominance in coin market caps. This is currently at its lowest level since July 2019.
Many investors repeatedly draw on Bitcoin dominance to identify an Altcoin rally early on. In the last few weeks, many Altcoins have seen an upward trend, especially in the Defi sector. As a result, the BTC dominance has been affected and has currently fallen to its lowest level since mid-2019. Now, Bitcoin dominance is about 60.8% with a downward trend.
The BTC dominance is calculated as the quotient of the Bitcoin market capitalization and the market capitalization of all cryptocurrencies listed on Coinmarketcap. So if new legacy coins are added, the total market capitalization increases and Bitcoin’s dominance continues to fall.
However, one must not forget that many projects are scams or simple money grabs. Many ICOs have only one goal — to collect money from naive investors and get rich. Accordingly, these projects will disappear in the future.
Besides, the real Bitcoin dominance is much higher, as several analysts have already noted. After all, tokens or coins, which have a relatively high market capitalization but hardly any trading volume, should not be included in the calculation of the total market capitalization. Therefore, real BTC dominance is strongly diluted at this point. How high the real Bitcoin dominance is, you can find out here.
There is no question, however, that the current hype about Decentralized Finance (Defi) has gained remarkable momentum, and there is no end in sight. Therefore, as long as Bitcoin and Ethereum do not move powerfully up or down in price, many Defi projects will probably continue to benefit from the Defi hype. One could already speak of an Altcoins Season — or rather Defi Season.
I am convinced that DEFI will play a significant role in the next Bullrun and could even trigger it. Comparable to the ICO’s 2017 many DEFI platforms will disappear after the Bullrun or will have similar effects as most ICO’s from 2017 — exit scam.
Nevertheless, Bitcoin remains undisputedly at the top and is legitimized by the growing interest of institutional investors. BTC is slowly losing its negative reputation and is increasingly becoming an established financial product to diversify its portfolio further. There are many reasons why Bitcoin should be included in your collection to a certain extent. BTC continues to dominate the market and is the clock generator. Therefore, a share in Bitcoin is certainly not wrong for a long-term investment horizon. It currently has the lowest risk of all cryptocurrencies.
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