Bitcoin’s dominance in the crypto market has surged to a 30-month high of 54%, showcasing the leading cryptocurrency’s robustness as the halving event approaches in April 2024.
The Bitcoin halving, occurring every four years, involves a reduction in mining rewards per block, slowing the introduction of new Bitcoin into circulation. In the upcoming halving, the reward per block will decrease from 6.25 BTC to 3.125 BTC.
As the growth in Bitcoin’s supply slows down amid rising demand, its dominance over other cryptocurrencies increases. During the 2017 bull market, Bitcoin maintained over 80% dominance but dropped to the 50-60% range in the 2021 bull run.
The current surge to 54% comes as excitement around ETFs and anticipation of the halving event build up. This rise aligns with Bitcoin’s push above $30,000, driven by the prospect of a potential approval for a spot Bitcoin ETF in the US.
Market analyst Noelle Acheson suggests that Bitcoin’s status as a safe-haven asset and the momentum around ETFs have contributed to its increased dominance compared to altcoins like ether. She highlights that Bitcoin often leads in early market cycles before investors become more comfortable with higher-risk assets.
While Bitcoin’s recent performance has outshined most altcoins, its strong momentum could signal a future rally in altcoins as money flows from Bitcoin into other cryptocurrencies. At present, Bitcoin’s dominance underscores its resilience as the crypto market eagerly awaits the next significant catalyst.