BTC dominance measures Bitcoin’s market capitalization as a percentage of the total cryptocurrency market cap, reflecting its influence over the crypto ecosystem. As of May 2025, Bitcoin dominance stands around 61-63%, a high not seen since March 2021, driven by institutional focus, ETF inflows, and Bitcoin’s perceived stability. Historically, dominance was near 100% when Bitcoin launched in 2009, but it dipped to 35-38% during altcoin surges like the 2017 ICO boom and 2021 bull run. High dominance often signals risk-averse sentiment, with investors favoring Bitcoin during market uncertainty, while low dominance indicates speculative interest in altcoins, often during bull markets. Traders use dominance to gauge market trends, with rising dominance suggesting Bitcoin outperformance and declining dominance hinting at altcoin seasons. However, the metric has limitations, as stablecoins and centralized tokens can distort its accuracy. Monitoring dominance alongside price trends aids strategic portfolio decisions.
