Bitcoin might be the original cryptocurrency that we’ll always remember but altcoins are gaining pace and popularity. Some noteworthy altcoins such as NEO, Litecoin, and the classic Dogecoin have become staples of a our portfolios.
But despite the efforts of alts to overtake bitcoin, so far btc looks to be clearly in the saddle — yet this fact is not set in stone.
We might see a time when bitcoin loses its hold over the crypto landscape for good – perhaps due to the newer and better scalability of different blockchain technologies.
To measure the impact of btc on the market a new index was developed named the Bitcoin Dominance Index (BDI). As a mixed and standalone indicator, the BDI meaures what percentage of the market is capitalized in bitcoin against altcoins.
For example, at the time of writing this article the market cap is at $143.26bn with a 51.1% bitcoin dominance. What this means is that bitcoin accounts for just over half of the total crypto market in gross capitalization.
Bitcoin Dominance and Market Health
From what we’ve observed over the last few years of bitcoin’s maturity is that the coin decides the prices and overall sentiment of the market.
When bitcoin rallies, alts rise; when bitcoin dips, alts crash.
What’s interesting is some altcoins (such as Ripple) can tend to move on their own momentum without any regard for what bitcoin is or isn’t doing.
This could be the effect of certain coins reaching their own turning points of maturity with experienced investors who are not so quick to drop their bags at the first signs of trouble.
A tool for viewing the bitcoin dominance can be found here.