Yesterday, was a tough day in the cryptocurrency markets. Bitcoin's price fell below $50,000 and almost every other cryptocurrency is also in deep red. Most coins have lost between 10 and 30%. But beyond the current price collapse, Bitcoin's share of the cryptocurrency market has also fallen. This is part of a trend that has continued throughout the year. Bitcoin's dominance has fallen from 69% at the beginning of the year to its current value of 51% - its lowest value since April 2019. Bitcoin's dominance While Bitcoin's dominance has spent most of its history above 60% - and many early years above 80% - it has seen some significant declines. The deepest of these occurred in January 2018, when Bitcoin began to retreat after touching the $20,000 level, and ICO mania caused many altcoin prices to surge. Similar factors are taking place today. The rise of decentralized finance (DeFi) has spurred competition between the largest blockchain platforms. Ethereum and Binance Smart Chain are competing to be the best smart contract platform. DeFi has also led to a price boom for many DeFi tokens that have appeared on these platforms. About half of the market share that Bitcoin lost went to other coins in the top 10, most notably Ethereum, Binance Coin and XRP. Until yesterday, the Ethereum price was on a roll. ETH hit a record high of $2,630, up 258% in 2021. Altcoins take share away from BTC Altcoins have claimed the other half of Bitcoin's lost market share. PancakeSwap's CAKE token, the native token of PancakeSwap's decentralized exchange on the Binance Smart Chain, is up 4000% year-to-date. Dogecoin, which has been frequently commented on by Tesla CEO Elon Musk on Twitter and has die-hard fans on TikTok has achieved similar growth. Citi analyst Ronit Ghose said yesterday that other cryptocurrencies that are more programmable than Bitcoin could take market share away from Bitcoin over the next decade. "The value of Bitcoin," he said, "will be affected by the utility of other cryptocurrencies." Bitcoin will also face competition from central banks' digital currencies. China has come to the forefront and is already piloting the technology. Countries such as the UK and US are also planning their own CBDCs. But since such currencies will not be decentralized, they will not be integrated into the cryptocurrency market and will not directly devour Bitcoin's remaining dominance. However, central bank digital currencies could undermine BTC's ambition to disrupt the global financial system. Tags altcoins bitcoin btc cbdc domination
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