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I Think Bitcoin's Dominance Is Decreasing

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Avatar for chrishoffman
Written by   45
1 year ago

The cryptocurrency industry is at a major crossroads.

Bitcoin has been around for a long time and that was it. This is what the whole world has been discussing when it comes to cryptocurrency. It either led to or was ruled by the maximalists who believed it was Bitcoin and believed there was little.

Of course, not everyone falls into this category. Now we see that some things have changed.

Many felt that the future of blockchain and cryptocurrency was far beyond a single asset class. This meant that over time we would see great innovations that will catch the attention of others. This will eventually lead to increases in token prices and further reduce Bitcoin's dominance.

This is something that becomes clear.

According to Coingecko, the latest market cap dominance puts Bitcoin below the 50% barrier.

We also see that the total Bitcoin and Ethereum make up 62% of the total.

These are still big numbers. However, it is important to note that we are seeing a big change. Not so long ago, these two tokens accounted for 70% of the total. Another fact is that Bitcoin was close to 70% last year.

Naturally, the markets are going down. This could be an uninterrupted trend or reverse course for a while. Either way, the general direction of the industry is clear.

Sites like Coingecko do their best to watch what is happening. Still, there are many things that fall outside of their total. While most of these will not immediately affect events, their peak over time can make a big difference. When considering projects like Leofinance and Cubfinance, that only adds a few million to the total. However, projects like this can be 10x or 20x over time.

This is important because there are hundreds, if not thousands, of projects out there.

Of course, we basically ignore the whole NFT market. We've seen some really mind-blowing numbers assigned to some recent sales. It looks like the whole industry is in a frenzy mode.

Again, we can question whether this will continue or not. Perhaps it won't happen and a more segregated process will take place. However, we cannot dispute the potential that comes from this innovation. Digital ownership does not disappear. In fact, it will only grow as you progress. A more digitalized world means that property representation is paramount. NFTs provide this.

DeFi has definitely captured the imagination of the crypto industry. It also collects a lot of money.

Here we see that this discussion is very important.

Most are familiar with DeFi activity taking place on Ethereum. It has grown significantly in the last 16 months and continues to grow.

Here is the current TVL according to Defipulse:

Now we're looking at over $ 60 billion. However, this is not the only game in town.

When we look at the numbers on Defistation, we see that large sums of money are locked in.

We're approaching locked-in at $ 95 billion between the two.

Of course, it shows the amount of DeFi coin then locked into the BSC. This is a new area for the crypto community. In addition, the BNB token has raised rapidly this year, providing a market cap of $ 87 billion.

I predicted that towards the beginning of the year, the DeFi market (TVL) would grow from just over $ 15 billion to $ 300 billion. This was a 20x estimate.

If this is true, at what speed are we moving, what will be the value of BNB, ETH and everything else in this industry?

All of this is important in terms of decentralization.

This is an issue that has been discussed frequently. It is sometimes difficult to see how this happens when we focus on several chains or token distributions in a particular project.

However, when we consider the sector as a whole, we immediately see how this happens.

Decentralization is important because it provides flexibility. When something is centralized there are points of failure. This is no surprise to most people in the crypto world. However, as we start the decentralization process, attack vectors are beginning to spread. It is no longer possible to lift the entire apparatus in a single movement.

Bitcoin survived many attacks. It was the primary goal of a FUD campaign that lasted nearly ten years. This was he who provided protection for others. As few paid attention to what was happening elsewhere, progress could have taken place without too much interruption.

Fast forward a few years and we see how well the shadow provided by Bitcoin is being used. There are a lot of things that are starting to take shape and that will make it difficult to remove it to a great extent. With the increase in overall market value, the money needed is only growing.

At the same time, the number of nodes operating in different chains is mind numbing. Who knows how many there are in total. The number of miners in Bitcoin has increased in the last few years. This does not include those in BCH, LTC, and other Bitcoin forks.

We have PoS systems that continue to expand later. They have more parent nodes along with block validators. Their total continues to grow over time.

Finally, we see the number of whales getting bigger. At one point, there were really only Bitcoin whales. This handful was the financial elite of the crypto world. This is no longer the case.

We see projects (blockchains) becoming extremely valuable. Therefore, its large owners are now saving a significant amount of money. Many are now combining this with DeFi, further increasing their position.

All this means that the industry is spreading in all directions, which is a good thing.

Bitcoin's eroding dominance shows how the cryptocurrency has grown and matured. This is an important step. I estimate that the ultimate dominance falls to the 10% range.

Given the fact that Bitcoin's price is likely to be higher in the future and therefore a larger market cap, it shows how much we can expect the value of the entire crypto industry to increase.

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Avatar for chrishoffman
Written by   45
1 year ago
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Yes the crypto market is flooding, although its still very new in the general sense, more and more mainstream markets, stores, etc are BEGINNING to use crypto systems and therefore theres still a long way to go for this ''new'' market in my view.

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1 year ago

Yes the crypto market is flooding, although its still very new in the general sense, more and more mainstream markets, stores, etc are BEGINNING to use crypto systems and therefore theres still a long way to go for this ''new'' market in my view.

I agree with your opinion. Thank you for your comment.

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1 year ago

Also thank you for your detailed article, most insightful :)

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1 year ago

Also thank you for your detailed article, most insightful :

Thanks you..

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1 year ago