Bitcoin (BTC) now claims almost half of the cryptocurrency market share, with its dominance rising to over 49%—a peak not seen in over two years.
CoinGecko’s data indicates that Bitcoin’s dominance is now 49.58%. This is nearly triple the market dominance of Ethereum (ETH), the next largest cryptocurrency by market capitalization, which has a presence of approximately 16.7%.
From the year’s start, when it was hovering at 38%, Bitcoin’s increasing dominance underscores its growing influence in the market.
Bitcoin’s ascendency in dominance is largely driven by its impressive rally throughout the year, as its value has soared by 81% since the beginning of 2023.
Bitcoin’s stellar performance has firmly established its prominence in the market.
Several factors might have propelled this surge.
Initially, rising concerns about inflation, geopolitical uncertainties, and the deepening divisions within the U.S. government have led investors to gravitate towards assets that offer a refuge from these volatilities. Given Bitcoin’s decentralized nature and finite supply, it has become a favored choice for those desiring a secure harbor in tumultuous times.
Furthermore, the potential green light for a Bitcoin exchange-traded fund (ETF) has amplified trust in the digital currency. If approved, a Bitcoin ETF would offer mainstream investors a streamlined and regulated pathway to delve into Bitcoin investments, potentially ushering in a considerable wave of new capital into the sector.
Bitcoin Could Hit $42K if a Spot ETF is Approved
According to information, Matrixport, a crypto financial service platform, has projected a significant surge in Bitcoin’s value if a spot ETF is introduced to the market.
Drawing parallels with the precious metals ETFs, which command a market capitalization of approximately $120 billion, Matrixport posits that if 10-20% of these investors opt to diversify their holdings into a Bitcoin ETF as a protective measure against currency dilution and inflation, the Bitcoin ETF could see an influx ranging from $12 billion to $24 billion.
Matrixport suggests, “Should Tether’s market cap grow by $24 billion, mirroring the potential inflow from the ETF, we could anticipate Bitcoin’s value ascending to $42,000. This is a conservative projection.”
Additionally, Matrixport pointed out that with an even larger investment inflow of $50 billion, coming from a 1% allocation suggestion by Registered Investment Advisors (RIAs), Bitcoin could potentially surge to a value of $56,000.
Recently, the anticipation surrounding the introduction of a spot Bitcoin ETF has been on the rise.
In a statement from the previous week, Coinbase’s Chief Legal Officer, Paul Grewal, expressed confidence in the Securities and Exchange Commission (SEC) granting approval for a spot Bitcoin ETF in the near future.
Grewal conveyed optimism, stating, “I’m very hopeful that these [ETF] applications will get the nod. Primarily because, based on the legal framework, they rightfully should.”
He further emphasized a recent judicial decision that went against the SEC, clarifying that the regulatory body lacked valid reasons to refuse Grayscale’s attempt to transition its GBTC Bitcoin fund into an ETF.