Bitcoin’s dominance of the crypto market has been on the rise. Because although bitcoin suffers a loss, altcoins experience the worst losses and are left with less market dominance. Bitcoin’s dominance has however not stopped here. The dominance of Bitcoin has also spread to the derivatives market, where it is more prominent.
Inflation Surges for Bitcoin
Since the December market crash, there has been a general decline in open interest in cryptocurrency markets. It currently stands at approximately $25 billion. This represents a drop of almost 50% since November’s peak, which was around $48 trillion. The same thing has happened in the cryptocurrency market during the same period. But bitcoin is not as successful when it concerns open interest.
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Now, the digital asset accounts for most of the open interest worldwide in the cryptocurrency market. Bitcoin makes up 63%, which means that more than $15 Billion in open interest is available to the crypto market.
It is a step up from the month of April when Bitcoin’s open interest dominance had declined to 50%. Indicators point to an increase in dominance of altcoins, which is a sign that there has been a decline in speculation interest due to their recent fall.
BTC is the dominant global open-interest currency| Source: Arcane Research
This follows the general trend of the crypto market where bitcoin’s dominance has also grown, although by a smaller margin. BTC dominance will likely continue to increase if altcoins do not perform well in the coming weeks.
BTC Is Still King
In May, losses on the cryptocurrency market were evident. However, some indexes have offered more protection than others. Comparing all of the May losses, bitcoin proved to be the most efficient investment.
The red month saw double-digit gains for all indexes. Bitcoin had suffered 18% losses, while the losses of all other indexes were greater than 20%. With 33% losses, the Small Cap Index took the biggest hit on the market. For the Large and Mid Cap Indexes the losses were 28% & 24%, respectively.
BTC rises to $31,000| Source: BTCUSD on TradingView.com
A rise in bitcoin dominance has been triggered by the decline of altcoins. BTC’s dominance had been resting at 42.5% at the beginning of May and by the end of the month had risen and peaked as high as 46%, the highest it had been in six months.
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The market will be welcoming a new month. It’s not clear if the dominance of altcoins will persist. Altcoins could quickly recover what bitcoin lost in the past month, given that the market is recovering.
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