Bitcoin dominance is Bitcoin's share of the total cryptocurrency market capitalization, shown as a percentage. Traders use it as a rough gauge of whether money is concentrating in Bitcoin or spreading into other coins. It is a simple ratio, and it is easy to read too much into it.
How It Is Calculated
The formula is Bitcoin's market cap divided by the total market cap of all cryptocurrencies, multiplied by 100.
If Bitcoin's market cap is $1.3 trillion and the whole crypto market is worth $2.5 trillion, dominance is 1.3 divided by 2.5, which is 0.52, or 52%.
Market cap is price multiplied by circulating supply. Bitcoin's supply grows slowly on a fixed schedule and is limited to 21 million coins, as set out in the design described at bitcoin.org. Changes in dominance therefore come mostly from price moves, in Bitcoin and in everything else.
Why the Number Differs Between Sites
There is no single official dominance figure. Each data provider decides which coins to count in the total, how to estimate circulating supply and whether to include stablecoins and wrapped tokens. Two sites can show figures a few points apart at the same moment. Use one source consistently and watch the direction of travel more than the exact value.
A Short History
Bitcoin launched in January 2009 and was the only cryptocurrency for its first two years. Its dominance stayed above 80% into early 2017.
That changed in 2017. The boom in initial coin offerings, most of them built on Ethereum, sent thousands of new tokens to market. By January 2018, Bitcoin dominance had fallen below 40%.
During the bear market that followed, many of those tokens lost most of their value and dominance climbed back, reaching about 70% in 2019. In 2021 it fell again, from about 70% at the start of the year to about 40% by May, as DeFi tokens, NFTs and meme coins rallied.
The pattern in past cycles has been that dominance tends to rise when the market is fearful and fall when speculation in smaller coins is strongest. Past cycles are a small sample, and nothing requires the pattern to repeat.
What Moves Dominance
Dominance rises when Bitcoin outperforms the rest of the market. That can happen in two very different situations: Bitcoin rising faster than altcoins, or Bitcoin falling less than altcoins in a sell-off. The chart looks the same in both cases, so always check price alongside it.
Common drivers of rising dominance:
- New money entering through Bitcoin first, including through spot Bitcoin ETFs, which began trading in the United States in January 2024.
- Market stress, when holders of small coins sell into Bitcoin or stablecoins.
- Altcoins losing value after a speculative peak.
Common drivers of falling dominance:
- Altcoins rising faster than Bitcoin late in a bull market.
- New token categories attracting capital.
- A large number of new tokens being issued, which adds to the total market cap.
- Growth in stablecoin supply.
Limits of the Metric
- Token issuance: every new token adds to the denominator. Total market cap can grow from new listings alone, which lowers Bitcoin's share without any money leaving Bitcoin.
- Stablecoins: dollar-pegged tokens are counted in the total on most sites. When stablecoin supply grows, dominance falls even though nobody rotated into riskier coins. Ethereum.org's stablecoin overview explains what these tokens are. Some analysts prefer a version of dominance that excludes stablecoins.
- Illiquid market caps: many small tokens have a high market cap on paper with very little trading liquidity. Their stated value inflates the total.
- No information about direction: dominance is a ratio. It does not tell you whether the market as a whole is rising or falling.
How Traders Use It
- Rising dominance with rising Bitcoin price: Bitcoin is leading. Altcoins usually lag in this phase.
- Rising dominance with falling prices: a defensive market. Altcoins are falling faster than Bitcoin.
- Falling dominance with rising prices: money is spreading into altcoins, often called altcoin season.
- Falling dominance with falling Bitcoin price: less common, and often linked to stablecoin growth or a Bitcoin-specific sell-off.
These are descriptions of what is happening, not forecasts.
Ethereum and the Rest of the Market
Some analysts track Ethereum's share separately, because ETH is by far the largest altcoin and often moves before smaller coins. A broad altcoin rally usually shows up as both Bitcoin's share and, later, Ethereum's share declining while mid-size and small coins gain.
Another approach is to skip dominance and look directly at pairs priced in Bitcoin, such as ETH/BTC. A rising ETH/BTC ratio means ETH is outperforming Bitcoin, with no distortion from stablecoins or new listings.
Common Mistakes
- Treating a dominance level as a buy or sell signal by itself.
- Assuming falling dominance means altcoins are rising. They may just be falling more slowly, or stablecoins may be growing.
- Comparing today's figure with 2017 without allowing for stablecoins and the far larger number of tokens.
- Using dominance to justify concentrated bets on small tokens. The SEC's crypto asset resources for investors describe the risks of these markets.
Nothing in this article is financial advice.
Key Points
- Dominance is Bitcoin market cap divided by total crypto market cap.
- It fell below 40% in January 2018 and to about 40% in May 2021.
- Stablecoins and new token issuance pull the figure down mechanically.
- Different data sites report different values.
- Always read it together with price.
Track on CoinMarketGuy
The Bitcoin price page shows Bitcoin's live market cap, and the homepage shows the total crypto market cap, volume and the Fear and Greed reading. Divide the first by the second for a quick dominance estimate. The trending page shows which coins are being searched most, a useful check on where attention is going.