Bitcoin (BTC) has reached a new milestone in its market dominance, surpassing 54% for the first time since April 2021. This indicates that the leading cryptocurrency is strengthening its position ahead of the halving event scheduled for April 2024.
The Bitcoin halving is a process that reduces the mining reward per block by half, thus creating a supply-demand imbalance that drives up the price of the asset. The Bitcoin halving occurs every four years, and the next one will cut the BTC mining reward from 6.25 BTC to 3.125 BTC.
Bitcoin Continues to Reign the Crypto World
As the total supply of Bitcoin is capped at 21 million, the halving of BTC mining rewards lowers the influx of new BTC into the market. Bitcoin market dominance is a measure of the crypto asset’s market capitalization relative to the overall digital asset market and reflects its strength and popularity.
A market dominance of over 50% is considered highly bullish and signals that Bitcoin is outperforming other cryptocurrencies. Bitcoin’s market dominance began to rise at the beginning of October when it climbed from below 49% to reach this new two-and-a-half-year high.
Historically, the month of October has shown a positive trend for cryptocurrencies, earning it the moniker “Uptober.” This trend was clearly demonstrated by Bitcoin’s significant percentage increase in recent weeks. Bitcoin’s value, which was slightly under $27,000 at the beginning of October, experienced a substantial increase, reaching a new annual peak of $35,000.
In 2017, Bitcoin maintained a market dominance of over 80%, followed by Ether (ETH) with nearly 10%–17% in market dominance. Over the years, Bitcoin has seen a steep decline in its market dominance due to the rise in the number of cryptocurrencies and the growth of several new tokens during the last bull run in 2021.
However, Bitcoin’s recent dominance surge suggests that it is regaining its status as the king of crypto and attracting more investors who are optimistic about its future prospects, especially amid the growing anticipation of a spot ETF approval by the SEC.
