Altcoins climb, Bitcoin dominance drops to lowest level since September

Bitcoin is at its lowest level of market dominance since September 2020.

This follows the latest BTC record record, which climbed to over $ 40,000.

As the enthusiasm around Bitcoin cools, Ethereum, DeFi, and altcoins are likely heating up.

The atmosphere began to change with the introduction of larger-scale Bitcoin institutional investors. The fundamentals that govern the cryptocurrency market, however, remain the same.

Following the historic rise in the price of Bitcoin , which doubled its old record of 2017, BTC’s dominance has started to crumble. This parameter corresponds to the percentage of the entire crypto ecosystem represented by the BTC.

The higher the level of dominance of BTC, the greater the market share of Bitcoin compared to that of all other cryptocurrencies combined, and vice versa. As Bitcoin continues to cool and Ethereum and decentralized finance (DeFi) heat up, BTC recorded its lowest level of market dominance since September 2020.

The altcoins begin a share of the domination of Bitcoin

Bitcoin recently peaked at nearly 70% market dominance. It has since fallen below 62.5%. Looking at CoinMarketCap’s chart of Bitcoin’s Percent Dominance, we can see opposite reactions with bitcoin and Ethereum price dominance.

When Bitcoin’s dominance fell, Ethereum’s total dominance in the market increased by around 11%, reaching over 16.5%. As the hype around Bitcoin subsides and the price begins to stagnate, more investors are turning to Ethereum.

Decentralized finance could help uptake

As a whole host of new investors enter the cryptocurrency space for the first time, many are now discovering the possibilities Ethereum can offer. Compared to the traditional financial system, ETH offers unique solutions.

The year 2020 was marked by the explosion of decentralized finance, or DeFi, with less than $ 1 billion in total value blocked (TVL). This figure now exceeds 25 billion dollars. The introduction of new decentralized exchanges, lending and borrowing platforms, insurance coverage platforms, etc. breathed new life into Ethereum.

These solutions show the world what the smart contract platform is capable of. Even with relatively slow transaction speeds and high transaction costs, the DeFi industry has consolidated itself as a value-added and competitive market.

Countless new platforms have sprung up on Ethereum, with some processing billions of dollars in transactions every day. Developers regularly launch new projects.

Many DeFi platforms are also seeing their own cryptocurrencies reach record prices. The dominance of BTC is gradually crumbling, which partly explains the drop in percentage.

As users become more familiar with Ethereum , the dominance of the bitcoin market may continue to weaken.