We have clarified the current data: the coin market is not looking good right now. In particular, Bitcoin hit its local bottom at $41,000 this morning, with no significant rebound since then.

Bitcoin 15-minute chart

Other top cryptocurrencies in terms of capitalisation have also left much to be desired. Most of them have already seen a weekly drop of more than ten percent.

Situation of top cryptocurrencies by capitalisation

What will happen to Bitcoin?

The main reason for the drop in the index is very simple – investors are looking to invest not only in Bitcoin itself, but also in altcoins. Their capitalisation is gradually increasing, while the growth rate of the same index for the main cryptocurrency is no longer as high. In an interview with Decrypt, crypto analyst Alex Krueger interprets what is happening as “low demand for Bitcoin” from individual investors.

Bitcoin’s all-time dominance index

So why is this happening? The fact is that with Bitcoin, it is already quite difficult for the average investor to “get rich quick”. The fluctuations in the price of the main cryptocurrency, while still relatively large, cannot provide a significant capital gain if one considers the entire crypto market.

On the other hand, Bitcoin is still attractive to big investors like MicroStrategy and Tesla, which can get big returns in dollar terms due to the large investment amount. In any case, ordinary investors prefer to invest in altcoins.

Experts confirm that altcoins are more attractive investments for the average crypto-enthusiast. As a reminder, one of the most profitable cryptocurrencies of 2021 was Shiba Inu, a clone of the famous Dogecoin meme, which was actively promoted by billionaire Ilon Musk. Shiba Inu rose 42.3 million per cent between January and December. It is the success of such coins and the hype surrounding them that is contributing to the fall in Bitcoin’s dominance index.

It is important to note that ordinary crypto-investors get involved with such projects not so much because of a "dislike" for Bitcoin, but because of the hype around popular coins. The latter is usually backed by a strong rate hike, which provokes even more popularity.

The growth of Shiba Inu last year

In addition, a big contribution was made against the backdrop of the booming DeFi sector and NFT tokens. Projects from these areas are running on Etherium, Solana, Fantom and other popular altcoins. Their growth has forced many to look away from BTC price fluctuations and become interested in market innovation.

Overall, Bitcoin is still the first coin in terms of capitalisation and the most secure investment of the entire market from a fundamental point of view. A decline in its dominance index isn’t necessarily a bad sign, it just signals that other projects want to compete for their market share. Well, industry participants are actively supporting them because of the marked increase in prices. Accordingly, further purchases of these assets provoke even greater price increases.

To illustrate the situation, we will give an example of Bitcoin and several popular alts. This is how the results of BTC price movements over different time periods look like.

Changes in Bitcoin price

And here is the performance of the already mentioned Fantom FTM. Naturally, Bitcoin does not stand even close to its figures.

Fantom FTM price changes

Here is the table for Syscoin (SYS), which showed growth on the background of the BTC collapse.

Syscoin SYS price changes

Cosmos (ATOM) also pleased its investors. Here are its results.

Cosmos ATOM price changes

In general, there are more than enough examples of this kind. And all of them clearly show how much more profitable it was to get involved with good alts than with Bitcoin. However, if BTC shows a wave of steady growth, as it did in early 2021, its share of market capitalization will surely grow.


We believe that this situation is absolutely normal, and it has happened many times before. Basically what happens is that investors see Bitcoin's underperformance and then get interested in alts. This is followed by buying such coins, which also moves their exchange rate even higher. However, as we already noted, in case of a serious rise of BTC, the main crypto-asset will once again attract a lot of attention and its dominance rate will go up.


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