Bitcoin Market Dominance Exceeds 51% as SEC’s Crackdown Erodes Altcoins Share

The scrutiny of the digital market shows increased Bitcoin dominance as prominent altcoins battle multiple crackdowns.

A review of market data in TradingView shows recent crackdowns by the SEC are boosting the Bitcoin share within the digital assets market. The proportion of Bitcoin’s market capitalization is increasing as tracked in the BTC Dominance Metric increase above 51%.

Bitcoin Revisits Mid-2021 Dominance

The rise in bitcoin dominance above 50% occurred on Monday since its realization in May 2021. The decline arose from China’s pronouncement to bank crypto mining triggering a plunge in Bitcoin’s price. Also, the decline is attributed to Tesla Inc’s decision to distance itself, citing environmental concerns. 

Bitcoin dominance would approach the 50% mark momentarily in June last year. The rise occurred when the United States began battling the rapid inflation rates prompting the dash to acquire bitcoins. At that time, bitcoin value rose as the Jerome Powell-led Federal Reserve deployed aggressive monetary tightening to contain inflation. 

The crackdown deployed by SEC against the crypto projects and exchanges sparked a similarly dramatic decline, particularly after unveiling the charges against Binance and Coinbase. In June 2022, Bitcoin realized a dramatic drop while Ethereum slid harder, with ETH/BTC pair attaining a 0.05 ratio. A similar outcome is evident, with the ETH/BTC pair declining from 0.07 to 0.064.

Value of Top-ranked Altcoins Decline

A review of top-ranking altcoins’ performance, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), reveals a substantial decline, unlike Bitcoin. The decline arises from the US regulator (SEC) classifying the three altcoins among the unregistered securities in the documents filed while suing Coinbase. SEC’s Gensler would restate that he viewed Bitcoin as a commodity. 

Among the factors fueling increased market dominance for Bitcoin is the lawsuit the SEC filed against Binance. In particular, SEC considered the crypto exchange’s native coin, BNB, to qualify as a security. The classification of the fourth-ranked cryptocurrency by market capitalization plunged 20% since the beginning of June.

Bitcoin Dominance Underrepresenting True Value 

The Bitcoin dominance metric is often portrayed as under-representing its true share. Often, critics allege that the inclusion of stablecoins hinders the true share of Bitcoin despite being effectively dollars reliant on blockchain for exchange. 

Nonetheless, the stablecoin segment is receding, particularly with SEC issuing a cease order to Paxos. The order directed Paxos to shut down BUSD in February, eliminating tokens valued at billions of dollars from circulation.  

MicroStrategy chair Michael Saylor had on Tuesday, June 13, forecasted Bitcoin dominance to edge above the 80%. He predicted that altcoins dominance would decline as regulators enforce their clamp down on the crypto projects and digital assets.  

Bitcoin Market Outlook

At press time 11:08 UTC, Bitcoin has rallied 7.77% in the past 24 hours to exchange hands at $28,834.74 per Coinmarketcap data. Further, Bitcoin has realized a seven-day increment of 11%, with its total market capitalization rising to $559.740 billion. 

Further scrutiny of the Coinmarketcap data shows Bitcoin’s daily transaction volume surged 86.35% to $28.118 billion. Bitcoin earlier tested a high of $29069.07 before retreating to a low of $26,668.79. Bitcoin surge surpasses the total market capitalization of the crypto industry, which has risen by 5.6% to $1.13 trillion. The higher surge arises from increased demand since BlackRock applied for a Bitcoin Spot ETF. Investors are optimistic that the SEC will accent the unique approval given Gensler’s recent pronouncement that Bitcoin is a security.  

With Bitcoin price increasing by 11.20% in the past week, it outperforms the global crypto market, whose growth averages 10.80% in the past seven days. Nonetheless, CoinGecko data shows the price is still 58.17% from the all-time high of $69044.77 it accomplished on November 10, 2021. Still, it is 42495.03% above the $67.81 price in 2013.