What is Bitcoin Dominance?

 Bitcoin dominance is a frequently reported item; however, usually, it is not available for download from must APIs.  

Bitcoin dominance represents the bitcoin total market capitalization as a percentage of total crypto market capitalization. Generally, total crypto market capitalization is hard to calculate since the number of cryptocurrencies and tokens varies over time. 

In the chart below, I calculate total crypto market capitalization using 7,500 cryptocurrencies and tokens downloaded (daily) from CoinGecko.com. 

The chart shows that Bitcoin's dominance is decreasing.  This suggests that other investors are investing heavily in other cryptos like Ethereum and Solana. 

Part of Bitcoin's dominance decline can be due to the fact that it is more of an asset than a currency since Bitcoin's blockchain can not be used to handle a large number of transactions quickly. This is why cryptos like Cardano (ADA), Ethereum, and Solana are extremely important.

Other questions regarding Bitcoin dominance relate to whether it has any predictive power and how quickly it changes over time. 








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