Bitcoin Dominance

Anyone who has studied cryptocurrency for a length of time, has likely come to the same conclusion: The price action of Bitcoin typically determines the price action of all other cryptocurrencies. This phenomenon is incredibly well documented. Bitcoin’s superiority over all other cryptocurrencies is known as “Bitcoin Dominance” or BTC.D. Although Bitcoin dominance sounds straightforward at first glance, the concept can become somewhat trickier, as you dive down the rabbit hole. In this article, we will take a close look at Bitcoin Dominance.

What Exactly is Bitcoin Dominance?

Bitcoin dominance is a metric used by analysts, which represents the economic mote between Bitcoin and every other cryptocurrency. It is simply a measurement of how much more valuable Bitcoin is than everything else. Bitcoin dominance is a powerful indicator, which goes by BTC.D

Why is Bitcoin Dominance so Important?

When Bitcoin was created in 2009, it was 100% dominant within the cryptocurrency market. The initial success of Bitcoin paved the way for the development of other cryptocurrencies. Bitcoin lost dominance as soon as other cryptocurrency projects were released, as it was no longer the only successful cryptocurrency in existence. This was a pivotal milestone in cryptocurrency analysis.

Bitcoin dominance typically drops whenever new cryptocurrency projects hit the market. Argo, a decrease of Bitcoin dominance is often indicative of new growth within the cryptocurrency ecosystem. As the cryptocurrency market expands, the incentive for participation increases along with it. Respectively, an increase in Bitcoin dominance can be indicative of a reduction of the total cryptocurrency market cap. If enough investors pull their funds out of altcoins, Bitcoin dominance will increase, even if the price of Bitcoin itself is unaffected. That being said, an increase in Bitcoin dominance is often implicative of redistribution amongst altcoins, as apposed to an increase in the Bitcoin market cap.

What is TRBDI and How Does it Differ From Bitcoin Dominance?

The Real Bitcoin Dominance Index, or TRBDI is a unique measurement of Bitcoin dominance, because it only includes Proof of Work cryptocurrencies, and excludes ICOs and Stablecoins. In fact, the only coins included in TRBDI are: Bitcoin BTC, Litecoin LTC, Ethereum ETH, Bsv BSV, Bcash BCH, Monero XMR, Dash DASH, Zcash ZEC, Bitcoin Gold BTG, Ethereum Classic ETC, Dogecoin DOGE, and Decred DCR.

Created by bitcoindominince.com, TRBDI was designed to paint a more decentralized picture of Bitcoin dominance, which is why stablecoins, ICOs and any cryptocurrency which utilizes a consensus mechanism other than Proof of Work are excluded. The developers of TRBDI claim that only Proof of Work cryptocurrencies can become “global money replacements”, as the overall goals of their backing projects are more synonymous with those of Bitcoin. Similarly, the TRBDI developers exclude ICOs, as they are inherently centralized during their initial deployment, and stablecoins, because they are a gateway between cryptocurrency and centralized fiat currencies.

Is The Bitcoin Dominance Metric Becoming Less Reliable?

As time goes on, we are likely to see instances in which altcoins become progressively more decoupled from bitcoin; although, it is unlikely that bitcoin dominance will become less reliable within our lifetimes. It is however interesting that bitcoin dominance has steadily declined over the course of this last rally, so much so that the term “altcoin season” has become a commonly used and understood term amongst traders of all skill levels. This is likely because investors are becoming more open-minded and speculative towards cryptocurrency as a whole, rather than just Bitcoin.

Which Killer Whale Products Take the Greatest Advantage of Bitcoin Dominance? Regardless of whether or not Bitcoin dominance is dwindling, the price action of Bitcoin still has a long way to go! We recommend Killer Whale Gain BTC to anyone who is looking to take advantage of the changes within Bitcoin dominance!

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