Bitcoin Forum

According to CoinmarketCap, Bitcoin dominance stands at exactly 69.7% at the time of writing. However, more critical analysis suggests that Bitcoin dominance is actually over 90%. This piece of information may come as a surprise to many, but let’s take a closer look and find out how this figure was arrived at.

Bitcoin dominance refers to the ratio of Bitcoin capitalization to the overall market capitalization of cryptocurrencies. During the altcoin boom that characterized the days when ICOs were popular, Bitcoin dominance was much lower than what we have today. Until the beginning of 2019, Bitcoin dominance was around 33%. The turnaround in fortune suggests that funds are moving away from altcoins into Bitcoin. At least for the time being.

https://www.youtube.com/watch?v=PRPp9nRZpqI

Bitcoin Dominance Is A Tool For Technical Analysis

This price and market capitalization behaviour is a tool used by a lot of traders in the marketplace. Sometimes, it serves as a pointer towards what direction the big monies are moving. It is assumed that it is always safe to stay with the big monies when navigating the trading environment. Some traders put it this way: “The Whales control the Wave”.

The idea that Bitcoin dominance is actually over 90% comes from a more critical analysis of the factors that determine valuation. Most crypto users derive their information about price, volume and market capitalization from websites like CoinmarketCap.

The formula used by these platforms is simply a multiplication of price and circulating supply. A closer look will tell you that this system can be flawed because anyone can simply trade a premined coin for any price. Multiplying the price by the total supply will not give us a realistic value, since the coins aren’t serving any utility yet.

Liquidity Is More Critical Than Price

The argument for a different method of calculating market capitalization suggests that the liquidity of the cryptocurrency in question must be considered. This is the basis of the assumption that
Bitcoin dominance is actually over 90%.

Here is a summarized explanation of this idea:

It is safe to say that every token that is being traded in the cryptocurrency market today depends on Bitcoin for a large percent of its liquidity. Almost all, if not every single token that is listed on an exchange has a Bitcoin trading pair associated with it. This places Bitcoin as a universal cryptocurrency. It is the lubricant that makes it possible to exchange many altcoins in the market.

Take for instance, when trying to trade between altcoins that are not directly paired against each other in an exchange. What most traders do is to exchange the initial altcoin with Bitcoin, and then secondarily use the Bitcoin to purchase the second altcoin. This is a very regular occurrence on normal exchanges. This practice puts Bitcoin everywhere and contributes immensely to the high liquidity level.

https://twitter.com/codeyisfun/status/1169621923812335616?


Volume Provides Better Information Than Price

The only platforms that provide direct exchange between altcoins are the more unconventional peer-to-peer platforms like Vertex.Market. Here, you wouldn’t need to go through multiple stages to fulfill your altcoin trades. It could even save you value in terms of time and fees.

Considering how complex it could be to measure liquidity, the closest index that can be used is volume. Therefore, the trading volume of a given cryptocurrency, factored with the current supply should produce a better valuation. This method puts Bitcoin dominance over 90%, in comparison with the rest of the market.

Bitcoin is known as the “Big Brother” of cryptocurrencies. It has sustained its leadership despite the various challenges that it has encountered along the way. As mentioned above, a significant part of Bitcoin’s huge demand is because other cryptos need it to survive. When this is put into consideration, we will tend to agree that Bitcoin dominance is actually over 90%.

https://medium.com/@official_83664/bitcoin-dominance-is-actually-over-90-cdf244989368

Bitcoin users already knew that fact that even though we just experience a sudden price drop from 10k$ to 8k$, bitcoin is still on a much higher value compared to the previous months wherein it is still on 6k$. This is one sign that bitcoin dominance is at play, it is when bitcoin price drops everything in the cryptocurrency market drops. If bitcoins value goes up everything goes up. The dominance of bitcoin shows by influencing the value of the whole cryptocurrency market.

Bitcoin Dominance is a clear indication to give incredible insight into the cryptocurrency market and by taking advantage of how this works can really earn you a profit and by observing the initial computation of the total market capitalization but the computation is just for Bitcoin Dominance because the community only cares about the dominance of Bitcoin, So the 69.7% is exactly the Dominance of Bitcoin on the market, the 90 % analyzation was just theoretical and not only apply to the exact amount of dominance bitcoin has, And as for me maybe this is what how analysis feel for them Bitcoin Dominance is still in the 90% and because of Bitcoin's popularity I guess. 

Exactly the market capitalization based on data and indicators that cannot truly be independently verified.

The 90%++ analysis may be theoretical but is based on very sound logic and rationale, quite unlike the very basic level of market capitalisation figures we're used to seeing.

Not saying the former is useless. Just that it's a terrible metric to use to decide how dominant Bitcoin actually is in terms of use.

that is basically the gist of what everyone who isn't an altcoin bag holder has been saying for over a year now. :)
it is good to see others are also catching on. this past 1.5 years of altcoin purging with all their dumps without recovery have been good to wake a lot of people up and make them realize that things such as "dominance" is just a meaningless number that is not showing what their name suggests.

Where did you arrive at 90%? No calculation whatsoever present in your article. Sure, we 'could' have that number, because your definition of dominance would then make every trade with BTC included, and most alts have that. Still, it's an arbitrary number and does not give a good insight into the market. It's similar to saying that most pair on the market is BTC, while the other is stablecoin. Alts did not exist, except ETH or exchange token.


I'm having a hard time understanding your post. Did you ever check the article above?

There's no exact number of dominance. You can ignore it because it's just a metric that is far from perfect. I do agree that liquidity is more important, but there's no further discussion. It started with a good premise but ended with a premature conclusion with the 90% thing.

I heard this before when I started a thread to discuss how Bitcoin dominance changed over time. And this is, by the way, why I know that it's not right to say that before the beginning of 2019 dominance was around 33% (officially). In fact, as you can see here (https://coinmarketcap.com/charts/#dominance-percentage), Bitcoin dominance was above 40% since June of 2018 and never went below this mark afterward according to coinmarketcap.com. As for this being a wrong way of calculating dominance - yeah, this is likely to be true. However, just like joniboini, I don't understand how you concluded that it's 90%+.

Now I will not be surprised at anything, although it is difficult to imagine that more than two thousand altcoins accounted for only ten percent of capitalization. Even if you look at the CoinMarketCap table now, the capitalization of bitcoin is now $ 182 billion. The capitalization of ethereum is more than $ 20 billion. This is already more than ten percent of Bitcoin's capitalization. Ripple has a capitalization of more than $ 11 billion. Together, these two coins will already make up more than 15 percent of Bitcoin's capitalization. So the figure of 70 percent of Bitcoin dominance is still more real.

Try to listen to every Tom and Dick all over the headline and you will know you are living a lie, that is being manipulated to get what they want you to be. Ofc it’s not 90%, the value must have been pluck out from their yesteryear wet dream. I would also tell you bitcoin value is not xxxx a coin, it’s over 9000, but would you believe me?

well when you bend the definition of certain terms such as "dominance" then you can assign any values you like to them. for example nowadays the definition of "dominance" is distorted and it currently refers to "market cap ratio" so yeah, obviously the so called "dominance" of bitcoin is not 90%. not to mention that market capitalization is a fake value on its own that was imported from stocks market into bitcoin market and it doesn't make much sense specially with how most altcoins have major premines or are being created out of thin air whereas outstanding shares (of a company) do not.

but if you use the real value of the term "dominance" then you realize that bitcoin is dominating the market not by 90% but by nearly 100%. that is why it has the highest volume, why everything is being measured and traded with bitcoin, that is why whenever bitcoin rises or falls everything else gets dumped....

I didn’t get to know dominancy on walls street, the guy over that may likened it to blue chip weighted average dominating the total DJIA performance of the year, I think it’s safe to assume a 96% weighted average, or in the other words the blue chip represent 96% of the total gain of the year DJIA surging from 16k to 27k, which also put all the red chips into questions what they do all these time, ofc we all know all the red chip losing value and approaching delisting, a total loss of value. If that’s what we have in crypto, I don’t think it’s how it work, despite alt are losing value but there is no delisting option for alt, it could have imminent value but it won’t disappear into oblivion, it could be the beauty of crypto for its inability to remove itself, and btc dominance wouldn’t get to 100% for the very same reason, it can get to 99.9%, but never ever 100%. Food for thought.

You're like the steward arguing about how the deck chairs should be stacked on the titantic.

The ship is still sinking. Get in the life raft now or you'll be left to drown.

Well this is the way it should be. Most altcoins are redundant and unnecessary, and several are actually a risk to mess with. Therefore logically the market prefers bitcoin, because none of the alternatives has shown or proven to do better, if anything, quite the opposite.

people still check coinmarketcap for bitcoin dominance.... dang[facepalm]

can someone please just create a altcoin aready that has 5trilion coins premined and just do one trade for $1. to create a coinmarktcap stat of $5trill for the alt. just to show that the 'market cap' is a meaningless number

yes folks, market caps are meaningless. bitcoin does not have $144billion in fiat stored away somewhere
yes folks, market caps are meaningless. someone can create a $5trillion cap for the cost of just $1

when will people learn

when they lost a huge amount of money by trusting some shitcoin that has a high market capitalization. that is the story with a lot of ethereum bag holders today as they are currently in nearly 90% loss and had invested in it just because someone told them it is "number 2" with their CMC sorting.

Doubt it, too many people are trading altcoins, many alt community , in general, I doubt

Bitcoins "dominance" is minute in the world of virtual currencies. With people not really understanding what makes a crypto-currency, and calling anything that is a new virtual currency a "crypto", it's perceived dominance will tank when the governments start to introduce their "cryptos",

I think I agree with your report and this is why we have seen that most altcoins are not really thriving at all, and for bitcoin dominance to have reached such high level, does this means the end of altcoins because I really doing understand what is happening with the alts, right in my eyes, bitcoin has consolidated several times which should have been an opportunity for altcoins to start risings, but despite all the consolidation, they still remain same.

Bitcoin is really gaining more popularity day by day and the reason why the popularity became this high now is because altcoins were not functioning properly as they should function, of they were serving as better alternatives, users and investors would not have rely on the use of bitcoin alone for transactions.

I agree with that. CMC only count what is listed on it. There are a lot of others trades which isn't listed nor tracked. So, volumes and dominance are not accurate.
Also, trading contest on exchanges cuase abnormal volumes for some time for its tokens.

Maybe if the top hundred coins of CMC was taken into consideration we can see the dominance of bitcoin to be above 90%. When we calculate on the whole even the shitcoins will get added. Though there isn't any perfect trade volume, an average value is taken. Such a calculation has given the result of bitcoin dominance around 68%, and if these shitcoins were eliminated the value will be close to 80%

CMC makes this calculation based on their altcoins data.
 According to CMC's data, there are 2904 coins or tokens in market. And BTC Dominance is about %69

Coingecko makes its calculation based on their own altcoin data also,
 According to Coingecko's data, there are 5761 coins or tokens in market. And BTC Dominance is about %67

So what is your database for this calculation? I don't think you have enough data to make this calculation.

Beside all the OTC action that happens outside of the reach of CMC, you have to add in the endless sea of dead shitcoins which have basically dust marketcaps, and due the fact that there are literally thousands, it ends up packing a chunk of dead, actually non-existent capital listed on those dead shitcoins, thus lowering Bitcoin dominance % by a long shot. The sum of all those things prove how the % is highly flawed and does not translate into reality. We are most likely back to near pre-shitcoin era, and all the main altcoins are going to continue to keep tanking against BTC since they have no fundamentals.

https://i.postimg.cc/xTxZK8jk/btc-vs-alts.jpg

I've been warning people about this but a lot of them would rather sink with their bags than admit defeat and go back to BTC. What can you do? Their loss.

Bitcoin dominates the Cryptocurrency world even in the entire dump field. I realize that Bitcoin cannot account for 90% of the whole market, ETH and BCH, along with some Altcoins, are still taking up a substantial proportion of the entire market. I prefer Altcoin because even in the worst of times it bulls even the bear market gets worse every day.

cmc is only for quick reference and not to be regarded as an accurate source of information. most of the figures are not correctly presented. you have to do your own validation if you want to get precise numbers.
and this percentage of BTC dominance will vary depending on which site you are in. it only exhibits that we cant have the exact number here because there are other factors that need to be considered. but it is crystal clear that BTC still holds its position as the major cryptocurrency among these sea of altcoins!

In the cryptocurrency market, bitcoin dominance is really  very high now, and 80 percent, 90 percent or more, is no longer significant. Moreover, this can hardly be accurately calculated.
I do not think that such a state of affairs is normal for a decentralized cryptocurrency. Even in tightly centralized currencies, we do not observe this. Therefore, altcoins cannot develop normally. For almost two years they have remained oppressed, although many have functionality far above bitcoin. This market has just begun to develop and we can’t say what result this development will bring even in the near future.

actually the data on these sites is exactly the same and it is accurate. the percentage is also the same thing if calculated using the same data. if there is any small differences then it is because the lists are different meaning one list has 2345 shitcoins and the other has 2456 shitcoins so the final result may be a little different.

Most of the variables used to determine market dominance are very controversial, because we know some exchanges manipulate the data and that includes transaction volume. So market dominance is this cloud in the sky statistic that has no real value and it is just used to confuse and manipulate traders investment decisions.  ::)

You also have to look at other things like global Crypto currency ATM distribution statistics and merchant adoption of the different coins and token to get a better picture of market dominance.  ;)

Bitcoin is a well-known cryptocurrency having highest value against fiat.

But still making a statement relating to the dominance of Bitcoin in the crypto market with an exact figure is wrong.

Few factors as making it clear :

Bitcoin has very higher fees comparing to other altcoins.

The time required by the network for confirmations.

Bitcoin has the highest value for exchange against fiat.

So, considering these facts major literate users are using alternative coins for faster transaction.
 
In such cases, most of the Bitcoins are already locked in such coins having huge marketcap with crypto market.

And according to blockchain explorer, only exchanger and independent user have their BTC in their control. Because the trader has use exchanger for exchange and trading with their Bitcoins and other altcoins.

I thought its dominance was 70%. Realistically, it's possible that more people have Bitcoins on exchanges then we realize. Anyway it's mathematically inevitable that altcoins will take some of that dominance. It's like saying back in 1998 cougar would only be the only search engine. Actually, that's a bad example because Google pretty much is the only search engine. Baby Bitcoin will still be this dominant in 20 years.

Market dominance is a figure that represents how much money is held in bitcoin, comparing to other cryptocurrencies–and is a measuring tool for assessing the relative health of other coins in the cryptocurrency ecosystem. When looking at the total market cap of all cryptocurrencies, Bitcoin has always maintained its dominance. Bitcoin was overvalued in the last last year and the situation we had in December 2017 was really a market bubble.

Now Bitcoin is the most necessary asset that sets the pace and pricing of the crypto market. Everyone trades, invests, exchanges thanks to Bitcoin. So 90% of domination is a real figure. No altcoin can change this at the moment.

But i see in this a positive point. Such domination eliminates weak altcoins, creating a stable top 10 coins on the market. What do you think about it?

That's right, and that dominance is likely to be for a long time to come

Price is misleading about dominance. There many cryptocurrencies that has more liquidity but less in price compared to other cryptos. Bitcoin is literally dominating the market now and it seems that we will see this image for a long time.

It's a lie, bitcoin dominance is not over 90%. It could be higher even lower than what we currently have. Do remember that some exchanges just fake volumes to attract traders and coinmarketcap feed on data that are available to them by exchanges.

Of course, the dominance of Bitcoin has never been 90%. Maximum 80%, if you do not take into account the capitalization of stable coins. It’s best to profit from investing in Bitcoin. Altcoins so far show only losses in the cryptocurrency market.

I would rather agree with the OP. Most of the altcoins had huge premine ratios, and as a result a vary large fraction of the circulating supply is being held in cold storage and never traded. If these coins and tokens becomes available for trading, then the exchange rates and market capitalization for many of the altcoins are going to collapse. The real market cap of BTC, as the OP pointed out will be somewhere in the 90% range.

I agree with you and i think bitcoin dominance is totally logic...the majority of altcoins didnt have any effect at the market and they just take place in exchanges...also when we talk about exchanges there is a ton of them and many exchanges born but its rare to see a change in the top 50 exchanges rank