Bitcoin Dominance, Highest Level in 9 Months | coindesk JAPAN | Coindesk Japan

1 year ago 58

Bitcoin (BTC) dominance — the share of Bitcoin’s market capitalization in the total cryptocurrency market — hit a nine-month high of 45.5%, according to TradingView data. It has exceeded 45% since June 25, 2022.

The cryptocurrency market has been rocked over the past two weeks by the collapses of crypto-focused Silvergate Bank and Signature Bank, with near-panic effects spreading to the broader banking sector. Bitcoin is seen as a less volatile asset than most other crypto assets, and Bitcoin’s dominance has so far risen during periods of heightened stress.

Healthy for the cryptocurrency market

The rise in dominance also coincides with Bitcoin price rising for almost three days. Bitcoin climbed above $26,000 for the first time since last summer as the US Consumer Price Index (CPI) released on February 14 showed a modest slowdown in inflation.

Bitcoin is near $24,700 at the time of this writing. It’s down 4% in 24 hours, but has risen more than 10% since the weekend.

“While Bitcoin’s dominance run indicates relatively little bubble action in the market (traders are buying Bitcoin, not speculative altcoins), crypto markets in general considered healthy for the health sector,” FundStrat Research tweeted on Thursday.

Additionally, the rising dominance appears to reflect investor interest in Bitcoin “rekindling when traditional banks like Silicon Valley Bank collapse,” said Fundstrat.

Anxiety over stablecoins

Over the past few weeks, concerns over stablecoins have also contributed to Bitcoin’s rise in dominance. Following the collapse of Silicon Valley Bank, USD Coin (USDC), the No. 2 stablecoin by market capitalization, temporarily deviated from the dollar peg.

Now that USDC has regained its dollar peg, uncertainty remains as regulators put stablecoins under scrutiny.

Data from CryptoQuant shows stablecoin supply has been declining over the past year.