If Bitcoin Dominance matters what would be needed to bring it up?

21 sats \ 1 replies \ @F 23 Sep

It doesn't matter, because anyone can make a shitcoin to lower bitcoin's dominance.

Also, stablecoins are included in the total market cap used to calculate dominance.

Matthew did a video on this: https://www.youtube.com/watch?v=3oGw_JhG3Lw

You are looking to the wrong site. The correct one is https://coinmarketcrap.co

Of course real building happens in bear markets, but bull markets fund it. In addition to selling more products in bull markets, alot of companies hold a significant amount of their capital in bitcoin.

As far as dominance, there are a few venture firms that are bitcoin only, but most are not. The higher the dominance, the more goes to bitcoin. All of the incentives for VCs will always be to funding altcoin projects, because it is the quickest way to get their returns. They don't need a working product, just a coin to pump and dump on retail. This can happen way faster than actual innovation can become profitable.

On the other hand, bear markets are disproportionatley hard on altcoins. As far as I know, no altcoin ever reaches a higher value in proportion to Bitcoin after its first bull cycle in any following bull cycle. (With the exception of Doge after Musk pumped it.) This may result in VC funding during bear markets to be a little more Bitcoin heavy.

If we don't count stablecoins, I don't think any coin (certainly none that currently exist) will ever get as close to reaching Bitcoin's value as ETH did after 2017.

0 sats \ 0 replies \ @pi 25 Sep

There are about 15,000 cryptocurrencies in existence as of this writing, as identified by CoinMarketCap.

Bitcoin’s share of the the total cryptocurrency market changes over time, but for example it currently has about the same share of the market (around 40%) now against these 15,000 coins as it did four years ago against only 1,500 coins. So, altcoins have mostly diluted each other.

Source: Lyn Alden's Investment Strategy. Proof-of-Stake and Stablecoins: A Blockchain Centralization Dilemma

0 sats \ 0 replies \ @sp 23 Sep

It's a vanity metric. Sheer market cap without daily volumes doesn't tell anything about the asset liquidity. Countless NFT collections pumped this number using washtrading.

Plus, as mentioned by many below, volumes can be artificially pumped by circular dependencies between "lending", "minting" and other shitcoin protocols that artificially move money in and out of exchanges.

The right question is: why dominance should be important?

The issue with the standard dominance metric is that:

  • It includes stablecoins, which aren't competing with Bitcoin's use case.
  • It includes tokens which can have inflated market caps (pre-mines, low liquidity, lock ups, etc.).

That said, you might be interested in this site which compares Bitcoin to other tokens with a fair launch and distribution:

https://buybitcoinworldwide.com/stats/bitcoin-dominance/

If you include Ethereum, Bitcoin's dominance is ~66%. This may not be terribly representative of "true" dominance because Ethereum had a ~50-60% pre-mine and also has ~10% of its supply locked up in the deposit contract.

Bitcoin dominance among the pure PoW coins with no pre-mine is ~95%. If you believe (as I do) that PoS is fundamentally broken and cannot last long-term, then this is the metric to pay attention to.

Yes. It shows how much further bitcoin needs to grow before it dominates the USD, which means there cannot be any rest at building until then.

https://coinmarketcap.com/fiat-currencies