What is Bitcoin dominance?
Bitcoin dominance describes Bitcoin’s share of the total market capitalization of all cryptocurrencies. If it is 56%, that means: out of every $1 currently invested in crypto, about $0.56 is in Bitcoin. The remaining share is spread across Ethereum, stablecoins, altcoins, and thousands of other projects.
This metric is not a price indicator. It doesn’t tell you whether Bitcoin is cheap or expensive. Instead, it shows how capital is distributed across the crypto market, which makes it a useful context and sentiment indicator.
How is Bitcoin dominance calculated?
Formula:
Bitcoin dominance = BTC market cap ÷ total crypto market cap × 100
What’s included in the denominator matters. It typically includes not only Bitcoin and Ethereum, but also stablecoins like Tether or USDC, all altcoins, and newly listed tokens. This has an important effect: as the crypto market grows and new tokens gain market cap, Bitcoin dominance can trend lower over time, even if Bitcoin performs well.
When Bitcoin launched in 2009, it was essentially the only cryptocurrency, so dominance was close to 100%. Since then, dominance has declined structurally as more projects have gained market share.
Long-term comparisons are still useful as long as you keep the changing composition of the market in mind. In most cases, the trend within a specific timeframe is more meaningful than comparing absolute values across decades.
How to read the Bitcoin dominance chart
The chart shows the dominance of Bitcoin (orange), Ethereum (blue), stablecoins (green), and all other cryptocurrencies (gray) over time. Here is what matters.
Rising Bitcoin dominance
Capital flows into Bitcoin relative to other crypto assets. This typically happens in uncertain market phases, when investors prefer the most established asset in the space. In these periods, altcoins often underperform.
Falling Bitcoin dominance
Capital rotates out of Bitcoin into Ethereum, altcoins, or stablecoins. If dominance falls in an overall rising market, it is often a sign that a broader rally (often called altcoin season) is starting or already underway.
Rising stablecoin dominance
This signal can have two causes. Investors may move capital out of risk assets without leaving crypto entirely, which is classic risk-off behavior. Or the overall stablecoin supply may grow because new stablecoins are issued. Both can push Bitcoin dominance lower, but for very different reasons.
For timeframes, the 1 month chart shows short-term shifts that are often triggered by individual events. The 1 year chart gives a clearer picture of the current market phase. The 5 year or max chart helps put historical patterns into context.
Market phases and rotation
Crypto markets move through recognizable rotation phases that are reflected in the dominance chart.
BTC phase: Bitcoin attracts fresh capital and dominance rises. Altcoins often underperform.
ETH and large caps: Capital starts rotating into Ethereum and established altcoins, and dominance flattens or declines slightly.
Altcoin season: Capital flows further into smaller altcoins and Bitcoin dominance falls more noticeably.
Risk-off: In bear markets, either Bitcoin dominance rises again or stablecoin dominance increases as investors try to limit losses.
This rotation is not a law of nature, but as a broad framework it has often held up historically. The counterpart to Bitcoin dominance is altcoin dominance, which roughly represents the combined market share of all other crypto assets. If you track the Altcoin Season Index alongside dominance, you get an even clearer view of where the market currently sits in the cycle.
Practical use
Market regime: If you want to know whether the market is currently in Bitcoin mode or altcoin mode, look at the trend over the last few weeks. A BTC dominance level that rises consistently over multiple weeks often suggests caution with smaller altcoins.
Risk appetite: Rising stablecoin dominance shows that a meaningful share of capital is waiting on the sidelines. This is not a buy signal, but it can indicate that there is a lot of capital that could potentially flow back into the market.
Portfolio weighting: If you diversify between Bitcoin and altcoins, dominance can be one of several inputs to reassess your allocation periodically. It is not a timing tool, but it provides context for the current market structure.
What Bitcoin dominance does not tell you
Dominance is not the same as price
Bitcoin can reach a new all-time high while dominance still falls, if altcoins rise even more. Conversely, dominance can rise even while Bitcoin’s price falls, if altcoins fall harder.
Stablecoins can distort the picture
Because stablecoins are part of the denominator, their growth can push Bitcoin dominance down even if underlying demand for Bitcoin has not changed. Some analysts therefore calculate BTC dominance excluding stablecoins to remove this effect.
New tokens dilute the denominator over time
With every relevant newly listed project, the denominator grows. A dominance level like 95% in 2013 is simply not realistic today, not because Bitcoin has become weaker, but because the market is fundamentally structured differently.
About the author
Hi, I'm Philipp. 👋
Founder coinbird.com
With over 15 years of experience in the IT sector, I love building easy-to-use digital products that actually help people. In 2017, I fell down the Bitcoin rabbit hole and gradually realized that the crypto world lacked simple, user-friendly tools for everyday people. That’s why I created coinbird.com – to make crypto easier to understand, more accessible, and transparent.
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