Definition
Bitcoin dominance is a metric that shows how large Bitcoin is compared to the rest of the cryptocurrency market, expressed as a percentage of total market value. It is calculated by dividing Bitcoin’s market cap by the combined market cap of all cryptocurrencies and then multiplying by 100. A higher percentage means Bitcoin represents a larger share of the overall crypto market, while a lower percentage means other coins collectively make up more of the market.
This metric is often used as a simple way to describe the balance between Bitcoin and the broader crypto ecosystem. When Bitcoin dominance is high, Bitcoin’s value is a bigger portion of total crypto value relative to other assets. When it is lower, it indicates that other cryptocurrencies, often grouped under the term altcoin, account for a larger share of total market cap.
Context and Usage
Bitcoin dominance is commonly referenced in market overviews and charts that track the size of different crypto assets. It provides a quick snapshot of how influential Bitcoin is in terms of total market cap at a given time. Because it is based on market cap, changes in Bitcoin dominance reflect price movements and supply changes across Bitcoin and other cryptocurrencies.
In discussions about the crypto market, Bitcoin dominance is used as a shorthand indicator of whether attention and value are concentrated in Bitcoin or more spread out among altcoin assets. It does not measure trading volume, technology, or adoption directly, but instead focuses purely on relative market value within the cryptocurrency asset class.