- Bitcoin’s share of the total crypto market cap has fallen to less than 58%.
- Bitcoin has always been the largest crypto by market cap, but its dominance has been challenged before.
- Ethereum’s share of the market is on the rise.
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Bitcoin has always been the dominant cryptocurrency by market cap, but winds of change may be in the air again as competing blockchains like Ethereum accelerate their growth.
Bitcoin dominance, the measure of how much the Bitcoin market cap makes up of all the value invested in cryptocurrencies, has fallen to its lowest level yet this year. It now makes up 57.9% of the total crypto market cap, according to data from CoinMarketCap.
The slide comes as DeFi on Ethereum continues its rapid growth and as other protocols like Polkadot and Cardano draw attention of their own, shifting value in the ecosystem away from the original digital asset.
In the earliest days of cryptocurrency, there was only Bitcoin. Competitors, in the form of Litecoin and Ripple, started to appear in 2013, but Bitcoin dominance remained above 75% for another four years, until early 2017.
From there, investments in Ethereum and other blockchains offering promises of greater utility via decentralized computation (as opposed to Bitcoin’s simple decentralized store of value) and smart contracts rapidly overtook investments in Bitcoin, crashing the metric to just 37.8% of the total crypto market cap in June 2017.
After a six-month rollercoaster ride, Bitcoin dominance reached its lowest level on record at 32.8% in January 2018. Even at its lowest point, however, Bitcoin controlled a plurality of the market. The competition split between Ethereum, Ripple, Bitcoin Cash, and a variety of other smaller coins during 2017 and 2018.
As Bitcoin’s share of the market cap has fallen in recent months, Ethereum’s share has increased. The Ethereum market cap now makes up just under 13% of the crypto market value, its highest level since August 2018. However, that’s still well shy of its all-time high of 31% in June 2017.
The last time Bitcoin dominance was this low came more than a year ago, in June 2019, as BTC's market cap recovered from its 2018 lows.
What’s different about then and now is that, at that time, the market cap for other blockchains like Ethereum and most altcoins were also in decline. Now the tables have turned—Ethereum and alts are gaining on Bitcoin in a big way for the first time since 2017.
Perhaps this time around, Bitcoin won’t have the staying power to hang on to its spot. But it's still the top dog, by far.