Bitcoin dominance hits highest level since April 2021

Bitcoin dominance, a measure of Bitcoin's market capitalization relative to the total cryptocurrency market capitalization, reached a high of 52.7% this past week, its highest level in three years since April 2021. 

Starting the week on Monday, June 22, with a BTC dominance of just 48.2%, this figure rapidly increased to 51.9% immediately following the launch of the ETH ETFs on Tuesday before gradually continuing its rise over the week.

This phenomenon occurred despite the main headlines focusing on ETH and its ETFs. A subsequent market-wide dump occurred following the ETH ETF launch, during which BTC was one of the strongest coins to rebound, quickly returning to its pre-ETH ETF highs

In stark contrast, ETH showed considerable weakness in terms of price action. Moreover, various altcoins have also shown considerable weakness against BTC, further contributing to the rise in BTC dominance to three-year highs.

This relative strength seen in BTC can be attributed to several factors:

• Absence of Grayscale’s GBTC conversion overhang, which, unlike ETH, has to contend with Grayscale’s ETHE outflows.
• BTC is the only cryptocurrency with a relatively established ETF. With the ETH ETF being just one week old, BTC remains the primary beneficiary of TradFi inflows from investors seeking crypto exposure through ETFs.
• The end of last week coincided with the Bitcoin conference, a much-anticipated event with 2024 U.S. presidential nominee Donald Trump as one of the most-anticipated speakers. Given Trump's recent public support for Bitcoin, the market likely priced in potential positive statements and plans surrounding BTC in the event of his election.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry’s most thought-provoking trends.