Recently, Bitcoin’s breakthrough of $100,000 has once again ignited the attention of global users to the crypto industry. As the representative of the crypto industry, Bitcoin has an unshakable position in the crypto field and has long occupied a large part of the crypto market. Its market capitalization is often regarded as a barometer of the overall trend of the cryptocurrency market. In this issue of TRON Knowledge Bureau, we will take you to understand what Bitcoin’s market capitalization is.
Simply put, Bitcoin Dominance is an indicator used to measure the relative market share of Bitcoin in the entire cryptocurrency market. Cryptocurrencies other than Bitcoin are generally referred to as Altcoins. For example, on December 17, 2024, the total market value of cryptocurrencies was approximately US$3.79 trillion, and the market value of Bitcoin was approximately US$2.14 trillion, corresponding to a market value share of 56.4%. This ratio can reflect the competitive landscape between Bitcoin and Altcoins.
Looking back at history, we can find that Bitcoins market capitalization has gone through several significant stages. CoinMarketCap data shows:
From 2013 to 2017, Bitcoin’s market capitalization accounted for between 76% and 96%, reaching a peak of 96% at the end of 2013, almost completely dominating the crypto market.
From 2017 to 2018, Bitcoins market capitalization share continued to decline, reaching an all-time low of 32.8% in early 2018.
From 2018 to 2021, the market capitalization share of Bitcoin gradually recovered, fluctuating between 32% and 70%, and reached 69.2% at the end of 2020.
Since 2021, the market capitalization of Bitcoin has been below 70% for a long time, and the market has shown a significant diversification trend.
Overall, the fluctuations in Bitcoins market capitalization share are affected by multiple factors such as market cycles, price changes, and the macroeconomic environment, reflecting the dynamic changes in market trends and preferences.
In a bull market with high sentiment, funds tend to chase Altcoins with higher return potential, resulting in a decline in Bitcoins market capitalization share; while in a bear market with increased market volatility or lack of confidence, Bitcoin attracts capital inflows due to its relative stability and safe-haven properties, and its market capitalization share shows a corresponding rebound. For example, during the bull market in 2021, Bitcoins market capitalization share dropped rapidly from 69.7% on January 4 to 40% on May 17. During this period, with the rapid rise of Altcoins, new public chains, Meme, DeFi and other sectors performed particularly well.
In recent years, technological innovation and the evolution of the market landscape are also reshaping the relationship between Bitcoin and other cryptocurrencies. For example, stablecoins and meme coins have become more influential and popular in the crypto market as their market capitalizations have increased significantly. The rise of emerging tracks such as real world assets (RWA) and decentralized physical infrastructure networks (DePIN) has also injected fresh blood into the market and brought new liquidity.
Despite this, from the beginning of 2024 to date, the market value of Bitcoin has increased from 50.3% to 56.4%, achieving a relatively significant growth. Behind this, the approval of Bitcoin spot ETF in the United States and the continued growth of Bitcoin prices have played an important role. According to SoSoValue data, as of December 17, the total net asset value of the US Bitcoin spot ETF was US$120.08 billion, with a strong growth momentum.
It should be noted that although the share of Bitcoin market capitalization can effectively observe the dynamics of the crypto market, it does not directly reflect the individual performance of Bitcoin or other cryptocurrencies. Its changes may decline due to the rapid growth of Altcoins, but this does not mean that the actual market performance of Bitcoin has deteriorated. In addition, some low-liquidity Altcoins projects may also affect the accuracy of the overall data to a certain extent due to their overestimated market capitalization. Users need to make a comprehensive assessment based on more abundant market data, perspectives, backgrounds and other factors to avoid misleading one-sided interpretations.
