Bitcoin’s market dominance reaches two-year high.

Bitcoin’s market dominance has increased to its highest level since July 2021. This suggests a shift in sentiment among traders and investors towards Bitcoin, the world’s pioneer and most substantial cryptocurrency. However, this milestone is highlighted by the current volatility of the crypto market, which is grappling with regulatory uncertainty and various factors that impact Bitcoin’s value.

The Resurgence Of Bitcoin Dominance

According to the latest data from TradingView, Bitcoin’s dominance, defined as its share of the total cryptocurrency market capitalization, has hit a high of 49.5%. This level has not been seen since July 2021 when Bitcoin’s dominance was over 48%. However, earlier this year in April, Bitcoin’s dominance briefly reached 48.83%, after which it fluctuated within a specific range.

Over the past week, there has been a notable increase in Bitcoin’s market dominance, coinciding with the US Securities and Exchange Commission (SEC) categorizing numerous tokens as unregistered securities. This happened in SEC’s lawsuits against the world’s largest crypto exchanges, Binance and Coinbase. Consequently, many of these tokens, such as Cardano (ADA), Solana (SOL), and Binance Coin (BNB), have experienced significant price drops while Bitcoin’s value has remained relatively stable.

Market Influences And The Upcoming BTC Halving

The regulatory actions by the SEC underscore an environment of uncertainty that has had noticeable effects on the crypto market. Amid this backdrop, Bitcoin emerges as a sort of safe haven. Michael Saylor, a prominent Bitcoin advocate, echoed these sentiments in a recent interview with Bloomberg, predicting that: “the entire industry is kind of destined to be rationalized down to Bitcoin and a half a dozen to a dozen other proof-of-work tokens.”

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Anticipation around the upcoming Bitcoin halving event, slated for April or May 2024, could also be a contributing factor to Bitcoin’s increasing dominance. This quadrennial event reduces the reward for mining new Bitcoin blocks by half, effectively slowing the rate at which new Bitcoins are created to manage inflation and maintain their scarcity. The impending halving will result in a block reward decrease from 6.25 bitcoins to 3.125 bitcoins.

Despite Bitcoin being in a downward trend in the past week, falling by nearly 5%, it has seen an uptrend over the past 24 hours, with a 2.3% gain in its value. At the time of writing, Bitcoin’s market price is $25,515, after initially trading below that price range earlier this week. Meanwhile, Bitcoin’s trading volume has decreased over the past 24 hours, indicating less trading activity.

Featured image from Unsplash, Chart from TradingView

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