Bitcoin dominance has increased to nearly 50% of the total crypto market cap. Bitcoin dominance rate is currently at its highest level since 2021. Tether’s USDT also increased its market share to over 8%. Let’s take a look at the details of the news.
Bitcoin and Tether dominance on the rise
Bitcoin, the largest cryptocurrency by market capitalization, and Tether, the most popular stablecoin. Both have increased their share of the overall crypto market. Dominance increased when measured as a percentage of the total crypto market cap. Bitcoin dominance rose to nearly 50% in the early hours of Saturday morning. At the same time, USDT dominance rose above 8.2%. As often happens with Bitcoin dominance spikes, Saturday’s spikes coincided with a major altcoin market crash. There are two reasons behind the increase in Bitcoin dominance.
On the one hand, the price of BTC remained resistant compared to many altcoins. Market values plummeted as the prices of tokens like Solana and Polygon dropped by more than 20% overnight. As a result, Bitcoin’s relative share in the total crypto market cap has increased. At the same time, Bitcoin’s relatively stable price offers investors some degree of protection. This is causing more funds from altcoin markets to turn to Bitcoin as investors seek to hedge against falling prices.
Tether advantage
BTC’s dominance rate has been rising steadily since November. It also increased sharply during the US banking crisis in March. After Saturday’s surge, Bitcoin dominance is at its highest level since 2021. Bitcoin’s strong liquidity makes it an attractive way for crypto investors to exit the altcoin markets. On the other hand, there is an alternative hedging strategy in stablecoins. USDT, the most popular dollar-pegged stablecoin, offers an easy way out of the volatility of the crypto market without fully switching to fiat currency.
Another factor affecting the increase in USDT dominance is the alarming price swings of the dollar-denominated stablecoin TrueUSD (USDT). On Saturday morning, the coin temporarily broke its bond from the dollar and fell as low as $0.9951. As we stated as Kriptokoin.com, after the sudden drop in value came an announcement from TrueUSD via Prime Trust that TUSD issuances will be “paused for further notifications”. The statement included the following statements:
“TUSD issuance and redemption services are unaffected and will continue to operate as usual. We would like to assure you that our partnerships with other banking institutions remain intact and enable smooth transactions.”
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