Bitcoin’s market share has dropped below 40% this week. According to statistics from TradingView, this is very close to the all-time low of 36.7% set in January 2018.
In fact, the ratio between the market capitalization of Bitcoin (BTC) and the total crypto market capitalization is known as market dominance.
It isn’t the first time in 2021 that its power has waned. According to CoinMarketCap, BTC plummeted to barely 40.3% of the total crypto asset capitalization in May, and it was close to that level again in September.
“Alt season” had been going on for a year
According to TradingPlatforms’ research, the data could indicate the start of an “alt season” in the near future. Altcoin market domination has more than tripled in the last seven years. Rising from 21% in 2014 to roughly 60% this month.
At almost $500 billion, Ether’s (ETH) market domination remains around 20%. The market share of ETH has increased from 10% to 20% in the last year.
Crypto analyst Altcoin Sherpa stated in a tweet on Friday that the “alt season” had been going on for a year. They cited a graph depicting Bitcoin’s market domination, implying that the downward trend could continue.
Strong signals of institutional crypto investment growth
In conclusion, it’s unclear whether institutional investments will help provide a floor for the dominance metric. Noelle Acheson, head of market research at Genesis Trading, told CNBC on Tuesday that she sees “strong signals” of institutional crypto investment growth accelerating in 2022.
She described the level of institutional investment growth in the crypto market as “amazing” over the last 12 months.
Besides, analysts from multinational banking giant JPMorgan indicated in October that institutional investors were driving the BTC rally at the time. “Institutional investors appear to be returning to Bitcoin, possibly perceiving it as a stronger inflation hedge than gold,” they wrote.
According to Glassnode’s on-chain data, BTC’s short-term supply has reduced by 32%. However, long-term holders have gained 16% to their treasuries in 2021.