Highest level in 30 months: Bitcoin’s dominance exceeds a historical level

Bitcoin’s market dominance has reached a 30-month high of 54% over the past few hours, indicating the growing strength of the leading cryptocurrency ahead of the halving event scheduled for April 2024.

Bitcoin halving occurs every four years, which reduces the mining reward per block by half and reduces the flow of new bitcoin to the market. And with the next halving, the bonus will be reduced from 6.25 bitcoins to 3.125 bitcoins per block.

As the supply of bitcoin slows down while demand rises, its dominance and scarcity increase, and consequently, its price rises. Bitcoin maintained its dominance of more than 80% in the market in 2017, but fell to the 50–60% range in 2021.

But with the excitement created by ETFs in the past few days and the approach of the halving event, bitcoin’s dominance has risen to 54%, the highest level since April 2021. The rise coincided with the rise of bitcoin above 30 thousand dollars amid news of a possible approval of bitcoin ETFs in the United States.

Market analyst Noelle Acheson says bitcoin’s appeal as a safe haven and the momentum of ETFs have helped cement its dominance over alternative currencies such as Ethereum.

With bitcoin outperforming most altcoins over the past few quarters, its bullish momentum could signal an upcoming altcoin rally as soon as funds start flowing from bitcoin to other crypto assets. Currently, its dominance reflects its strength as the cryptocurrency market awaits the next major catalyst.

The prices of digital currencies have witnessed noticeable rises over the past few days due to a court ruling in favor of the American company “Grayscale Investments” from the federal appeals court last Monday in its quest to establish instant funds for trading bitcoin on the stock exchange, despite the objection of the Securities and Exchange Commission.

Among the leading companies competing to offer similar products are the asset management companies “BlackRock” and Fidelity Investments”. Traders of digital assets expect that ETFs will contribute to the expansion of the adoption of digital currencies.

These official decisions reinforce the previous ruling issued by the court two months ago, which confirmed that the SEC was “arbitrary “in its rejection of Grayscale’s attempt to convert the Grayscale Bitcoin Trust Investment Fund worth about 17 billion dollars into an exchange-traded investment fund.