Bitcoin has soared to a four-year dominance high of 64.89%, with prices hitting $97,000. This resurgence comes after a drop to 55% dominance in December due to market fluctuations and tariff impacts. Institutional demand for Bitcoin is on the rise, driven by a flight from traditional assets, but trade negotiations with China might change the landscape and reduce Bitcoin’s market grip in the future.
Bitcoin has marked a significant milestone, reaching a dominance level of 64.89% in the cryptocurrency market—its highest since January 2021. This surge comes as Bitcoin’s price vaulted above $97,000 on Friday morning. Starting the year at a much lower dominance of 57.90%, Bitcoin’s market share has fluctuated, even dipping to 55% as late as December due to various market influences, including political events.
The initial hype following Donald Trump’s election victory had propelled altcoin prices; however, as the administration imposed tariffs, sentiment turned sour. Bitcoin wasn’t immune to the initial fallout but has shown some recovery, aided by recent policy exemptions that have spurred investor interest in the leading cryptocurrency, though many altcoins continue to struggle.
As for the numbers, Bitcoin is presently only 10.9% shy of its all-time high of $108,786 from January. In stark contrast, major competitors like Ethereum, Solana, and Dogecoin have seen their values decline significantly, with drops of 54%, 43%, and 61% from their recent peaks, as per CoinGecko.
Just a moment before this report, Bitcoin’s price was slightly down at $96,947, though still enjoying a 0.7% increase for the day. David Morrison, a Senior Market Analyst at Trade Nation, credits Bitcoin’s performance largely to its first-mover advantage. He points out the heightened acceptance Bitcoin enjoys compared to other, more speculative cryptocurrencies, which helps fuel confidence among investors.
Morrison noted that Bitcoin’s appeal persists even during adverse market conditions. Its supply is strictly limited, and many see it as a reliable investment thanks to a track record of recovery after downturns. This may be particularly significant as the U.S. grapples with ongoing tariffs, and Bitcoin’s resilience could further solidify its market share.
The recent trends suggest that a portion of the investment community is seeking refuge from traditional assets like U.S. treasuries, directing funds into Bitcoin instead. Notably, Bitcoin ETF flows have outpaced those of gold ETFs by a striking $4 billion this week. Morrison highlights that institutional interest in Bitcoin might drive its market dominance even higher, with potential for it to exceed 70% if momentum continues.
However, the landscape might shift if the U.S. manages to strike a positive trade deal with China, which could ease economic tensions. Reports indicate that the Trump administration is considering a new set of trade negotiations with Beijing. Depending on how this plays out, we could see a revitalisation in the broader cryptocurrency market.
Morrison warns that should the overall economic environment become more stable, risk appetite typically grows. This could encourage investors to explore beyond Bitcoin into other more speculative cryptocurrencies, potentially diminishing Bitcoin’s dominance—though some of these alts might outperform Bitcoin in terms of percentage growth as opportunities unfold.
