CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Bitcoin (BTC) Dominance Has Been On An Impressive Run As Of Late, Touching On The Highest Levels Since Early 2017 - We Provide Analysis On The Move And Note That The Metric Likely Understates The 'Dominance' Of BTC
BTC dominance, the measure of BTC market cap as a percent of the entire sector's, has been on an impressive run. The benchmark, which made lows in early January at 33% touched above 70% last week, the highest levels since March 2017. The crypto turnaround has been extremely highly correlated with the metric, unlike what was seen in the 2017 bull run where BTC dominance fell from above 85% to below 40%.
Crypto Takeaway: The increases in BTC dominance has underscored just how different this crypto rally has been than the one we saw in 2017. While the prior run-up was very much predicated on investors falling in love with a slew of alt-coin stories, this year's has seen a repricing of the sector generally and correlations have fallen. Furthermore, the current BTC dominance metric, which bases market caps off 'last trade' and doesn't account for liquidity, probably underestimates the degree to which the crypto is actually dominating the space. Over 15% of the 'market cap' in crypto comes from coins outside of the Top 10, many of which have little to any secondary market for their tokens (chart) of seriousness, another more recent precedent, such as Bitfinex's deposit/withdrawal frictions in late 2018 has seen high correlations with near-term price weakness.