Bitcoin, the decentralized digital money, has witnessed a surge in its portion of the overall digital assets market.
Calculated as a ratio of the total market capitalization of digital assets, bitcoin dominance experienced a notable increase, reaching close to 50% during the early hours of Saturday morning.
Saturday’s upward trajectory in bitcoin dominance was accompanied by a meltdown in the altcoins market.
The surge in bitcoin dominance can be attributed to a number of factors.
The Banking Crisis
The recent banking crisis that has emerged in the United States, which could grow into a global issue, has driven many investors to look for alternate assets in order to hedge themselves against the unforeseen consequences of numerous bank bailouts by the governments.
Read more on the subject : As US Banking Crisis Wildfire Spreads
Bitcoin, with its decentralized nature, finite supply and scarcity, and enormous network power backing it has gained the attention of many investors. These are strong fundamentals and unique attributes that other digital assets lack.
Although individuals may be inclined to explore altcoins and engage in speculative activities to generate quick profits during normal circumstances, they inevitably return to the ultimate digital money when faced with serious situations.
This has caused a flow of capital into bitcoin from various altcoins.
Read more on the subject : It’s Not Just About Price – Bitcoin Fundamentals Have Bullish Taste
Price Resilience In The Recent SEC Clash
Another contributing factor is the resilience of bitcoin’s price compared to numerous altcoins during the recent SEC clash with digital asset exchanges. During this period, altcoins faced substantial losses reaching double-digit percentages.
Read more on the subject : Bitcoin Is The Only Winner In SEC Clash
Strong Price History In The Long Run
Simultaneously, the constant upward trajectory of bitcoin’s price in the long run provides investors with a certain level of security in a world where fiat savings get corroded by inflation steadily. This prompts a flow of funds from different asset classes into bitcoin.
Read more on the subject : 97% of Institutional Investors Optimistic About Bitcoin
These factors have caused bitcoin’s proportionate slice of the overall market capitalization to expand.
Bitcoin’s dominance rate has been steadily climbing since November 2022 and experienced a significant boost during the U.S. banking crisis in March.
In the wake of Saturday’s surge, bitcoin dominance has reached its highest level since 2021.