For years, the cryptocurrency industry has been denoted by BTC market cap dominance, which currently holds over 50% of overall market capitalization. That’s a single asset taking up 50% of the total market capitalization of an entire industry.
In contrast, the entire sector of info tech companies comprises 26% of the S&P500 – and that’s regarded as being overweighted. Of this 26%, Apple takes up 7.5% while Microsoft takes up 6.7%, as of 2023.
Of course, in terms of overall market cap, both Apple and Microsoft have more volume than Bitcoin. Much of the drive for tech stocks is fuelled by AI demand, and we think AI is a major sector going into 2024, that will be even bigger when combined with crypto
What happens when BTC market cap dominance starts to break down?
We wrote extensively about BTC market cap dominance in a previous article. Few investors have a handle on what it really means. Since January 1st, 2023, Bitcoin dominance has started to lessen. And, depending on how severe the shift is, it could result in a severe re-evaluation of existing altcoins.
Usually, altcoins go up or down with the price of Bitcoin. But if this correlation is no longer as strong, it could pave the way for more impressive returns in the altcoin markets – as well as most potential losses. It makes for more volatile returns, in an already volatile industry.
If #Bitcoin mirrors past bull runs (2015-2018 & 2018-2022) from their respective market bottoms, projections suggest the next market peak could land around October 2025.
— Ali (@ali_charts) January 24, 2024
Between May 9th, 2022, and the recent Bitcoin ETF approval, Bitcoin has been dominant. That’s a total of 600 days. What most remain unaware of is that this period of dominance is coming to an end. This is highly suggestive of an altcoin period.
The entire market is at the precipice of a major shift, that can be taken advantage of. It could lead to new wealth generation, mainly through crypto and AI.
BTC dominance slipped to 40% in 2021
In 2021, when crypto coin prices were at an all time high, BTC market cap dominance was under 39%, with Ethereum at 19%. Before 2021, the last time Bitcoin dominance slipped to this level was 2018.
This is a major market shift and there are substantial opportunities for altcoins to make a break when this is happening. Plenty of coins are at the cusp of a breakout, and we believe that altcoin season is just beginning.
But even in an altcoin market, you have to be careful to select the winners, especially small cap crypto coins. Returns will be asymmetrical and not uniform, which is why you’ll need a professional, exclusive investment service that makes recommendations based on charting information, sectors, market trends, and fundamental news.
In our premium research service, we do the analysis so you can follow the market alerts, to take advantage of major changes in the crypto markets.
Disclaimer: This is not financial advice. Please consult with a licensed financial advisor prior to making any investments.