Bitcoin’s price has surged dramatically since the recent U.S. election night, reaching a record-breaking all-time high of over $93,000 on Wednesday before dipping back below the $90,000 mark. This bull run has firmly established Bitcoin as the top-performing cryptocurrency, leaving alternative crypto assets struggling to keep pace.
Although altcoins often follow Bitcoin’s market movements, they have been unable to match the performance of the world’s leading cryptocurrency in this current rally. As a result, the Bitcoin Dominance Index (BDI) climbed to a new cycle high of 61.39% on Wednesday, as reported by TradingView. This is the highest level observed since March 2021. The BDI reflects Bitcoin’s market value as a percentage of the entire crypto market. While somewhat crude, this metric excludes certain types of crypto assets, such as stablecoins pegged to the U.S. dollar, for a more relevant comparison.
For some market observers, the ETH/BTC trading pair offers an alternative way to gauge Bitcoin’s dominance relative to Ethereum, often considered Bitcoin’s main competitor. Despite record inflows into spot ether exchange-traded funds (ETFs) last week, ether has given back most of its gains relative to Bitcoin since U.S. Election Day.
Dogecoin Defies the Trend
Unlike many altcoins, Dogecoin has defied market trends by rising 145% against Bitcoin over the past month. Analysts attribute this outperformance to Elon Musk’s ties to the victorious Trump campaign, as Musk has been a prominent supporter of the meme-centric cryptocurrency.
Bitcoin’s lead may be influenced by numerous factors, including recent technical advancements such as layer-two networks and Ordinals. Layer-two solutions enhance Bitcoin’s capabilities, providing features commonly found on other crypto networks like Ethereum and Solana. The current wave of institutional interest in Bitcoin, spurred by spot bitcoin ETFs and Bitcoin’s emerging role as “digital gold,” has further solidified its market dominance. Notably, former President Donald Trump has suggested establishing a “strategic bitcoin stockpile,” and BlackRock has hailed Bitcoin as “a unique diversifier.”
While Bitcoin’s dominance continues, market dynamics may shift as alternative cryptocurrencies work to keep up in this ever-evolving landscape.
