Bitcoin dominance (BTC) increased. But before starting with this article, it is important to explain that dominance is a metric that reflects the percentage of the total capitalization of the digital asset market that belongs to the currency created by Satoshi Nakamoto.
To know how much dominance is today, you have to divide the BTC market capitalization between the total capitalization of the cryptocurrency market.
According to Coinmarketcap data, The dominance reached March 11 reached a level of 61.3%the highest since 2021. This is an increase from the minimum of 54% that was recorded in December 2024.
The graph also reflects that BTC’s dominance has remained in an upward trend since 2023, indicating that the performance of The Altcoins is linked to the speculation and feeling of the market. For that reason, they are more vulnerable to periods of correction.
Matrixport, an investment firm, argues that this phenomenon is “a clear evidence that the rebound of the Altcoins was shortly,” he adds: “It lasted just a month, from the election of Donald Trump in November until the beginning of December, when a stronger American employment report changed the expected market to a more aggressive federal reserve (Fed).
As cryptootics has reported, in January, the organism that leads Jerome Powell chose to keep interest rates around 4.25%-4.50%instead of promoting more cuts. In a speech that he provided in the Capitol, the head of the Fed said he was not trouble in lowering interest rates because the main objective is to lower inflation to 2%.
The news shook the assets considered risk, such as BTC and cryptocurrencies. When the interest rate is high, the cost of indebtedness increases and there is less liquidity in the system. In these contexts, investors migrate their holdings to assets that generate less yields and, at the same time, are not exposed to market fluctuations, such as treasure bonds.
To this we must add that the digital asset market was dyed red as a result of the commercial war that Trump unleashed.
On March 4, 25% tariffs entered into force for imports from Mexico and Canada, and 20% for China products. However, after negotiations, Trump postponed the measure until April.
Then, March 11, Duplicate 50% tariffs for Canada’s aluminum and steeland 25% for the same European Union metals (EU). In response, the EU will impose tariffs for 28,000 million dollars to American products.
To aggravate the situation, Trump did not rule out a recession during an interview with Fox News, increasing economic uncertainty.
In this context, the price of BTC fell below $ 82,000, 25% below the historical maximum (AH) of 109,110 dollars reached on January 20Trump presidential assumption day.
Matrixreport points out that “investors have abandoned the Altcoins and have turned to BTC, which, despite their own decline, has significantly exceeded cryptocurrency market performance in general.”
This is because for many BTC investors it acts as a shelter asset in times of economic uncertainty.
Unlike Fíat money, Bitcoin is not subject to the decisions of the governments on duty nor to the constant devaluation caused by the issuance or monetary policies of the central banks.
Finally, and not least, is that its broadcast is limited to 21 million units, and each halving reduces the amount of BTC created, increasing its shortage and, potentially, its value.