Coming off a solid showing in May, one that benefited ETFs such as the CoinShares Valkyrie Bitcoin Fund (BRRR ), bitcoin remains the king of cryptocurrencies. That much is confirmed by its $2.1 trillion market capitalization as of midday Tuesday, June 3. That’s more than six times the market value of second-place ethereum.
Bitcoin dominance is an oft-discussed phenomenon and it holds implications for funds such as BRRR. Not surprisingly, the subject gains more attention prices as rise — a trend that’s currently playing out. Some crypto market participants are rbrn wondering if another “alt season” will ever arrive.
“Bitcoin’s rising dominance fits a familiar pattern. Historically, bitcoin’s market share climbs during market downturn and recovery periods, then declines as speculative capital chases higher-beta bets deeper into the cycle,” noted Matthew Kimmell of CoinShares. ”In both 2017 and 2021, bitcoin dominance peaked before altcoins surged and market breadth expanded. We are once again approaching similar dominance levels today.”
Bitcoin Dominance Not a Threat
There are 9,744 digital currencies on the market, according to CoinMarketCap data. A massive amount is highly speculative and has no utility. Additionally, just 35 cryptocurrencies, including bitcoin, have market caps in excess of $3 billion. That confirms the landscape is largely populate by small- and micro-cap players.
“Bitcoin’s share of the total crypto market cap has been at around 60-65% over the past month, nearing levels last seen amidst the heightened 2021 bull period,” added Kimmell. “Broaden the scope to include stablecoins — designed to mimic the US dollar on crypto rails — and about 70% of the market is effectively pegged to either bitcoin or dollar.”
Bitcoin dominance, which has clear implications for funds such as BRRR, has been further enhanced by factors such as President Trump’s push to make the U.S. the crypto capital of the world and corporate buying of bitcoin.
Additionally, Congress’ unwillingness to materially reduce spending is viewed as potentially destructive for the U.S. dollar. That scenario could be compelling some investors to prepare for bond and currency market calamity with bitcoin. So macroeconomic stars may be aligning in favor of BRRR and bitcoin. And that would further cement the latter’s dominance.
“So, yes, we believe bitcoin still has room to run, in the near and long term. The structural canvas looks different from 2017 or 2021. Should current conditions persist, the window for a runaway alt‑rally narrows, while the probability of a measured, fundamentally driven market rotation rises,” concluded Kimmell.
For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.
