In recent news, Bitcoin’s dominance in the cryptocurrency market has soared, leaving altcoins in the dust, as per data from Matrixport, a leading blockchain financial service platform. As of March 12, Bitcoin’s dominance, an evaluation of Bitcoin’s proportion of the entire crypto market capitalization, has ascended to 61.2%, a significant increase from a cyclical low of approximately 54% in December.
Matrixport pointed out the rising dominance of Bitcoin as a clear indication that the rally of altcoins was ephemeral. The rally had a lifespan of just around a month, commencing with the election of US President Donald Trump in November and concluding in early December. This coincided with a surprisingly robust US job report, which shifted the market’s focus towards a potentially more assertive Federal Reserve.
Typically, Bitcoin’s dominance dwindles towards the end of market cycles as capital is redirected towards altcoins — digital currencies other than Bitcoin. However, it seems the recent trends have deviated from this norm.
In January, the US Federal Reserve chose to maintain steady interest rates rather than introducing another series of reductions, influenced by the healthy US job data. The assertive tone of the Fed affected stocks and cryptocurrencies adversely, with Bitcoin’s spot price dropping by about 20% following the central bank’s announcement on January 29th.
As of March 12, Bitcoin is trading at approximately $82,750. However, it reached a record-breaking high of over $109,000 in December. Altcoins, typically more susceptible to macroeconomic fluctuations than Bitcoin, have suffered more.
“Astute traders have moved their investments from altcoins to Bitcoin. Despite its own decline, Bitcoin has significantly outperformed the broader crypto market,” Matrixport commented.
The future rally of Bitcoin largely depends on whether the Fed decides to increase interest rates to ward off inflation. On March 12, the February Consumer Price Index — a measure of US inflation — was lower than anticipated at around 2.8%, marking the first decline in both Headline and Core CPI since July 2024.
“Inflation is slowing down in the US,” reported The Kobeissi Letter in a post. Data from the CME Group, a US derivatives exchange, suggests that the market overwhelmingly anticipates the Fed to keep rates steady at its next meeting in March.
