Bitcoin dominates as altcoins correct heavily and BTC whales accumulate.
Over the past few weeks, the value of the world’s biggest cryptocurrency, Bitcoin (BTC), has been decreasing due to selling pressure. Following lawsuits by the US Securities and Exchange Commission (SEC) against crypto exchanges Coinbase and Binance last week, the value of BTC has once again fallen and is currently below $26,000. At present, BTC is being traded at $25,785 with a market capitalization of $500 billion. However, compared to other altcoins within the crypto industry, Bitcoin has gained market dominance as they continue to decline more sharply than BTC.
Bitcoin’s market dominance has now reached nearly 50% of the entire cryptocurrency industry. The crash in the altcoin market occurred because the SEC named 67 tokens as securities. Among the top ten altcoins that experienced the most significant correction are Binance’s BNB, Polygon’s MATIC, Cardano’s ADA, and Solana SOL.
In such a situation, the rise in Bitcoin dominance indicates that it is performing better than other altcoins. This clearly shows that Bitcoin is a safer asset in comparison to other altcoins within the crypto industry.
Recently, as altcoins faced a significant decline while Bitcoin remained relatively stable, Bitcoin’s market share has risen to 50%, reaching a new high since April 2021. During the bear market period from 2018 to 2022, Bitcoin’s market share remained above 50% for an extended period and even reached as high as 69%, according to Colin Wu.
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Furthermore, Bitcoin’s dominance rate has been steadily increasing since November 2022 and has surged even further during the banking crisis earlier this year.
Crypto Market Shaky, the SEC Strengthens Its Grip
The broader cryptocurrency market appears to be unstable at the moment following the SEC’s stringent regulatory measures last week. Investors have been withdrawing their funds, resulting in low trading volumes. Richard Galvin, co-founder of Sydney-based hedge fund DACM, remarked:
“There was some bounceback after the overselling on the weekend, but the markets are extremely fragile. Crypto-specific factors are playing the main role, given the recent SEC actions. It seems like there is a resistance on the downside at $1 trillion market cap.”
Investors are worried due to the confusion surrounding the regulation of crypto tokens. In the United States, Bitcoin is regarded as a commodity, but SEC Chair Gary Gensler believes that most other tokens should be subject to laws that protect investors. He also believes that trading platforms should register with the SEC. This uncertainty, coupled with the recent actions taken against Binance and Coinbase by the SEC, has impacted investor sentiment. Consequently, Robinhood Markets Inc decided to remove specific altcoins from its platform, which has further contributed to these concerns.
Moreover, the total assets under the SEC’s control have also surged as the federal securities regulator has initiated several enforcement actions over the last year.
