As of May 2, 2025, Bitcoin (BTC) dominance reached 64.5% — the highest level since early 2021. This means that more than two-thirds of the entire cryptocurrency market capitalization is concentrated in BTC.
📈 Why is Bitcoin dominance growing?
1. Institutional investments
Since the approval of spot ETFs for Bitcoin in the US and Asia in early 2024, large investors have been actively increasing their share of BTC in their portfolios. Companies like EY and Capriole Investments note the growing trust in Bitcoin as 'digital gold'.
2. Macroeconomic instability
Amid global economic uncertainty, investors are seeking reliable assets. Bitcoin, due to its limited issuance and decentralized nature, is becoming the preferred choice for capital preservation.
3. Government support
In March 2025, the US administration announced the creation of a strategic Bitcoin reserve, which strengthened trust in the cryptocurrency and contributed to its dominance growth.
📉 How does this affect altcoins?
The rise in BTC dominance is usually accompanied by a decrease in interest in altcoins. Many of them lose in price and liquidity as investors reallocate capital in favor of the more stable Bitcoin. For example, in the first quarter of 2025, the CoinDesk 20 index, reflecting the dynamics of major altcoins, fell by 23.2%, while Bitcoin strengthened its position.
🔍 What's next?
If BTC dominance continues to grow and exceeds the 70% level, this could lead to further weakening of altcoins. However, in the case of stabilization or decline in dominance, renewed interest in alternative cryptocurrencies may occur.
For investors, it is important to closely monitor the dynamics of Bitcoin dominance, as this indicator can serve as a gauge of current sentiment in the cryptocurrency market and help in making investment decisions.