Excerpts from CareYourPresent – a crypto enthusiast
Bitcoin Dominance – What does it mean?
The term Bitcoin dominance has always been appearing everywhere in the CRYPTO world. What is exactly Bitcoin Dominance? At the very top of the CoinMarketCap’s homepage, you will always see this number. However, what does this number means?
Calculating BTC dominance is very direct. If the total Market CAP of all Cryptocurrencies is $1 Trillion whereas Bitcoin’s Marketcap is 400 Billions. Then Bitcoin’s dominance would be 60%
Let’s look at Bitcoin dominance history
From the above Bitcoin dominance chart, we can see that in 2013, Bitcoin had a market dominance of 94%. ERC-20 tokens didn’t exist back then, Ethereum, stablecoins, USDT didn’t even exist then too. Fast forward to 2017, the altcoin season began.
In Feb 2017, Bitcoin dominance was 85.4% whereas Ethereum was $5.7%. However, within 4 short months, Bitcoin dominance drop to just 40%. Bitcoin prices then crashed after the legendary first bull run in 2017 before going to a Bitcoin’s dominance at time low of 32.8%.
Bitcoin metric usefulness
Hence, BTC dominance only give you a part of the picture of the whole story. It can tell you a gentle idea of how much of your capital you should allocate to altcoins as compared to ETH/BTC but it is not the full picture.
Do also bear in mind that the Crypto market CAP is only 1 trillion as compared to other asset classes. How high will BTC/ETH goes and will BTC dominance goes below ETH in future? Your guess will be as good as mine. But I am optimistic about Crypto in the long term.
Forecast of Bitcoin price in both short and long term
Let me make a bold forecast on bitcoin price in the short term. We have a solar eclipse on 25 October and solar eclipse are usually bad for crypto markets.
Hence, I stick my neck out and forecast that the price of bitcoin will be very bearish after the eclipse and hence I will be doing shorting for bitcoin. However, over the long term especially after 2024 onwards bitcoin will be up up and away!