For the past few months, Bitcoin has been leading the crypto market more than ever, reaching a level of dominance not seen since 2021. This rise in power leaves little room for other digital assets, and the altcoins seem increasingly fragile in the face of this Bitcoin wave. So, in the face of this situation, should we distance ourselves from altcoins, or is it too early to draw definitive conclusions?
Bitcoin's Overwhelming Dominance
On September 16, 2024, Bitcoin dominance reached 58%, a multi-year high that reflects renewed investor confidence in the asset.
This figure is not insignificant. It represents the share of bitcoin in the entire capitalization of the crypto market, and this progression has accelerated in the last two years. After the collapse of FTX In November 2022, which saw bitcoin's share plunge below 40%, the trend has slowly but surely reversed.
Today, whileEthereum and other altcoins struggle to keep up, Bitcoin is gaining ground almost overwhelmingly.
The network Ethereumfor example, saw its market share fall below 14%, a three-year low. This decline in Ethereum, which is considered Bitcoin's main rival, shows how much the current market dynamics are concentrated around BTC.
However, this extreme Bitcoin dominance is not without risks. Such a massive market share can indicate a market that is too focused on a single asset, creating a dangerous dependency.
For altcoins, this could mean marginalization or even a continued decline in demand, putting projects in difficulty.
Altcoins: assets under threat or opportunities to be seized?
As Bitcoin’s dominance reaches new heights, the question arises: do altcoins still have a future? On the one hand, Bitcoin’s rise could scare some investors away from altcoins and focus on the market leader.
On the other hand, this situation could open up purchasing opportunities for those who believe in a strong comeback of altcoins during the next “altseason”.
Experts are divided. Some, like the analyst Rekt Capital, believe that Bitcoin’s dominance could rise further, recalling that a similar trend in 2019 pushed Bitcoin’s dominance up to 71%. If this scenario repeats itself, altcoins risk being left behind, performing poorly for an extended period.
However, other specialists, such as Cryptollicaanticipate a turnaround. According to them, Bitcoin dominance could decline by mid-2025, opening the door to a new phase of expansion for altcoins.
This “altseason” could stem from a slowdown in Bitcoin, thus directing capital towards more modest, but equally promising, projects.
It is also essential to consider that some altcoins, despite the current dominance of Bitcoin, continue to have solid use cases. Projects like Ethereum Or Polkadot have robust underlying technologies and vibrant ecosystems. This environment could offer a safe haven to investors willing to wait for these altcoins to regain their former glory.
Should we flee altcoins?
The choice to move away from altcoins is not as clear-cut as it seems. Sure, Bitcoin’s dominance is a crucial piece of data, but it’s important to remember that the cryptocurrency market is notoriously volatile.
A meteoric rise in Bitcoin could precede a major correction, leaving room for altcoins to regain ground.
Cautious investors may be tempted to turn to Bitcoin, which is seen as more stable and resistant to fluctuations.
However, those who believe in diversification know that some altcoins still represent attractive investment opportunities.
The crypto market has shown in the past that altseasons can emerge at unexpected times, offering substantial gains for those who waited. Meanwhile, a little-known project is shaking up the market.
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