Bitcoin Dominance Surges by Over 78.5%, Hitting a 40-Month Peak

Analytics platform CryptoQuant highlighted in a recent post that Bitcoin dominance began increasing steadily in late 2022. Specifically, it rose to 78.5% today from 38% in November 2022.

Bitcoin (BTC) dominance has surged by over 78.5% in 2023, hitting a 40-month peak. This compares to Ethereum’s (ETH) market capitalization, which currently stands at $313 billion to Bitcoin’s $1.1 trillion, as per the latest market data.

The surge in Bitcoin dominance indicates that more investors are showing an interest in Bitcoin compared to Ethereum. This dynamic has led to speculations among investors on whether BTC’s price could retest $70,000 soon.

Bitcoin Dominance Rises Amid Price Decline

Analytics platform CryptoQuant highlighted in a recent post that Bitcoin dominance began increasing steadily in late 2022. Specifically, it rose to 78.5% today from 38% in November 2022. Meanwhile, Ethereum’s market dominance has declined by 1.5%, although it has remained relatively stable over the past two years.

Surging Bitcoin Dominance Amid Spot ETF Launch, But Will It Continue?

The surge in Bitcoin dominance comes amid price declines in the cryptocurrency market. BTC has seen substantial fluctuations in the past two years, with the price falling to as low as $55,000. Its price has since recovered, even crossing the $70,000 level.

The cryptocurrency’s dominance can be attributed to the growing speculations for a potential spot Bitcoin ETF that began in 2022. At the time, many analysts forecasted that the commencement of the Exchange-Traded Fund (ETF) trading would put BTC on an uptrend. Renowned asset manager Monochrome even received approval to launch one in Australia back then.

In the US, eleven issuers launched their spot Bitcoin ETF products in January after receiving approval from the Securities and Exchange Commission (SEC). These ETFs have experienced substantial inflows. By June, these ETFs witnessed inflows of $21.52 million, on a typical bearish day average.

No Threat From Dominance and April Halving

The increasing trend in the spot Bitcoin ETF market remains unchanged despite discussions about an Ethereum ETF and its eventual launch in July this year. On the other hand, interest in the Ethereum ETF market remains low, as indicated by low inflows into the fund.

Previously, important events such as the ICO bubble and bubble peak-2021 shaped patterns in the market that tended to force a major BTC-ETH competition. Based on this precedence, Ethereum may move on to positive momentum after a similar significant event.

Another major trend contributing to BTC’s growing dominance is its fourth halving event in April. The network reduced a block from 6.25 BTC to 3.125 BTC via this event.

Despite the event, its price stayed relatively flat, trading at $66,500 per coin as of April 23. In surprising news, the Bitcoin network achieved a new milestone in May. According to the details, the transaction count on the network rose to 1 billion, specifically in block 842,241.

This milestone was achieved following the introduction of Ordinals and Runes. Bitcoin Runes utilizes the UTXO transaction and the OP_RETURN opcode to improve token production on BTC.

Bitcoin Growth Catalyst to Watch

At press time, BTC’s price was trading at $60,070, up 1.4% in the past 24 hours. Analysts believe more inflows into the spot Bitcoin ETF market could further propel BTC’s upward trend.

Another growth catalyst likely to push it higher is the potential re-election of Donald Trump as President of the US. The former president has embraced the crypto sector and even raised millions in cryptocurrency for his campaign.

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