Introduction
When I was new to the crypto ecosystem I was confused with some terms and names because some might look the same but different and some were very confusing to understand although, I still get confused with some I come across but not often anymore. One of the terms or things I was confused about was the difference between Bitcoin and Bitcoin dominance, anytime I see the price alert of both of them I always wonder why different prices when they carry the same name and I know some newcomers to the crypto space still wonder about that too.
When receiving price alerts for the crypto market I always see the different price of the Bitcoin dominance and Bitcoin and was wondering until I made a little research and found out that Bitcoin dominance actually tells or measure how the crypto market cap and Bitcoin market cap is performing, in a general sense it’s a ratio of both the total market cap and Bitcoin market cap. For easy clarification and explanation to get a vivid explanation, Bitcoin dominance is;
Bitcoin Dominance = Bitcoin Market Capitalization/ Total Cryptocurrency Market Capitalization
So you can get the Bitcoin dominance value from this formula above
What Affects or Controls the Bitcoin Dominance
Bitcoin dominance has helped traders and investors guide through their way in the crypto market after studying its patterns and trends. What really affects Bitcoin dominance?
Stablecoin in a bear market: When there’s a bear market it’s obvious that the price of the crypto market cap will go down and also Bitcoin dominance but what really happens is that during the bear market or before it becomes really bad investors quickly transfer or lock up their coins into stablecoin thereby causing the Bitcoin dominance price to go down.
The fight for popularity with new coins, when this happens it usually causes the Bitcoin dominance to decrease. This is when new projects are being developed and look promising, when they gain attention, investors tend to lose interest in Bitcoin thereby affecting Bitcoin's dominance.