Bitcoin Dominance Surges to 58%, Reaching Highest Level Since April 2021, Amidst Regulatory Scrutiny
According to a recent report from Coin Metrics, Bitcoin's relative percentage of the total cryptocurrency market capitalization has reached 58%, its highest level since April 2021. With a market capitalization of $590 billion, Bitcoin has extended its lead over Ethereum and other smaller altcoins. The overall market cap for the cryptocurrency industry currently stands at $1.2 trillion, as reported by Coingecko.
This development comes amidst increased regulatory scrutiny from U.S. regulators, who have recently classified some cryptocurrencies as unregulated securities, resulting in significant market capitalization losses for those assets.
Bitcoin has been leading a bullish rally in the past week, driven in part by BlackRock's filing for a spot Bitcoin exchange-traded fund (ETF). This move by the Wall Street giant has boosted Bitcoin's dominance in the crypto market and spurred investor interest, despite previous rejections of ETF applications.
The price surge in Bitcoin has also had a positive impact on other assets, including Grayscale's Bitcoin Trust (GBTC). The "GBTC discount," which represents the difference between the share price and the net asset value (NAV) of Bitcoin held by the trust, has been decreasing and reached a monthly low of -30%, according to data from YCharts.
Coin Metrics' report highlights that Bitcoin's dominance had declined during the crypto spring of 2021, hitting its lowest level in January 2022 at 37% of the global crypto market cap. However, the latest data shows that Bitcoin's presence in Coin Metrics' CBMI 10 index for the top 10 cryptocurrencies has reached its highest point in two years, accounting for 65% of the index. It's worth noting that stablecoins like Tether (USDT) or USDC are excluded from this metric.
As of the current data from Coingecko, Bitcoin has gained 85% year-to-date and is currently trading at $30,395. It has outperformed most other cryptocurrencies in 2023, with notable exceptions being Bitcoin Cash (BCH) and Lido Finance (LDO).
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