Bitcoin’s dominance in the cryptocurrency market has been steadily increasing since 2023, even as new coins and tokens flood the industry.
Currently, Bitcoin holds approximately 61.6% of the total crypto market share, slightly down from its recent peak of 64.3% on February 3. The climb above 60% dominance occurred on February 2, coinciding with broader market concerns over a prolonged trade conflict involving the United States and its global partners.
Economic uncertainty tends to impact high-risk investments the most, and altcoins have felt this pressure more than Bitcoin due to their lower liquidity and higher volatility. As a result, investors have shown a preference for the relative stability of BTC over smaller, riskier assets.
ETFs and Market Cycles Impacting Altcoins
Unlike previous market cycles, where profits from Bitcoin often flowed into altcoins, the introduction of Bitcoin exchange-traded funds (ETFs) has altered this dynamic. These ETFs concentrate liquidity within their structures, limiting the capital that would traditionally move into alternative cryptocurrencies.
Historically, investors have cycled funds from BTC into progressively riskier assets—starting with large-cap altcoins before shifting into smaller-cap tokens. However, the presence of institutional investment vehicles and the overwhelming influx of new tokens have changed the landscape, leading some analysts to suggest that the era of widespread altcoin booms may be over.
Oversaturation of Crypto Tokens
The sheer number of cryptocurrencies in circulation has reached unprecedented levels. On February 8, CoinMarketCap listed just under 11 million unique digital assets. By March 15, this number had ballooned to over 12.7 million.
January 2025 alone saw the launch of over 600,000 new tokens, with many of them being memecoins or low-cap altcoins created on fair launch platforms. According to market analyst Jesse Myers, failed coins don’t simply disappear; instead, they linger with valuations between $10,000 and $100,000, locking up investor funds in illiquid assets.
The rapid proliferation of these tokens has even led Coinbase CEO Brian Armstrong to reconsider the exchange’s approach to token listings in an effort to adapt to evolving market demands.
With Bitcoin’s growing dominance and the saturation of the altcoin market, many investors are now questioning whether the traditional altcoin cycles will ever return or if Bitcoin’s grip on the market is here to stay.
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