Explained: Why bitcoin’s dominance is down this bear market
Indeed, bitcoin’s dominance dropped significantly from 63% in January 2021 to just 42% by May. It then slipped even further to a bottom of 40% during December.
Sadly, the article is NOT an explanation at all. I wrote about this way back in Q1 2021, that the mantra from institutions was to diversify. Then, take a look at proto-indexes such as the NASDAQ Crypto Index (NCI). It isn't good for an index to have one behemoth - for example, Standard Oil or Aramco - there must be at least the appearance of a market of multiple coins.
The growth of stablecoins is also a factor, but the diversification agenda seems to be playing out as intended. The NCI weightings seem old data, but it isn't supposed to be a managed fund but an asset tracker.
would also be interesting to see a chart of bitcoin dominance ex-stablecoins.
we can easily calc n approx snapshot.
BTC dominance 38.6%
but
market cap = 858.2 - 136.4 = 721.8
BTC dom x-scoins = 330.9/721.8 = 45.8%
still low historically but about average for the past 12 months, meaning that the 3 top stablecoins have not been draining money away from BTC.