As of June 20th, 2023 Bitcoin accounts for more than half of the cryptocurrency market cap – crossing 50% dominance for the first time since April 2021.
BTC dominance surges since FTX collapse
The chart shows Bitcoin dominance (BTC.D) bouncing from a local bottom of $39.9% in November 2021, when FTX and its FTT token collapsed, triggering a sell-off in most digital assets that hasn’t stopped to date.
For the better part of 6 months, vapourware digital assets have trended down against Bitcoin. BTC.D shot upwards, jumping to 47.7% from 43.5% in mid-March, as banking insolvencies wrought havoc on the traditional finance sector. Specifically, when creditors wanted to cash out, banks did not have their money, leading investors to flock to digitally scarce hard assets such as Bitcoin and Litecoin.
Another sharp move higher took place in early June, moving from 47.4% to close the first week of the month at 49.1%, as US enforcement actions intensified.
Bitcoin remains steady
As reported previously, the Securities and Exchange Commission (SEC) has been on a crusade against the cryptocurrency space. The latest enforcement actions were against Binance and Coinbase, which coincided with another uptick in Bitcoin dominance.
In more filings, the SEC alleged that both exchanges sold unregistered securities, violating securities laws and operating as unregistered securities exchanges.
Across both flings, 19 alternative cryptocurrencies were branded ‘unregistered securities’ by the agency. These included ATOM, BNB, BUSD, COTI, SOL, ADA, MATIC, FIL, SAND, MANA, ALGO, AXS, CHZ, NEAR, FLOW, ICP, VGX, DASH, and NEXO.
Digital commodities such as Bitcoin and Litecoin were not part of the crackdown. However, some have argued that it’s only a matter of time before overzealous regulators target users directly, opening the door to individual persecution (as is the case in China).
Meanwhile, Bitcoin has remained relatively stable during SEC enforcement action.
Digital silver lags
Litecoin, often referred to the Silver to Bitcoin’s Gold has become a topic of debate too. Despite lagging behind Bitcoin, Litecoin’s halving event is set for August 2023, potentially causing a supply shock to the system.
As noted by market intelligence platform intotheblock, the digital commodity has seen a consistent increase in daily active addresses, consistently outpacing other cryptocurrencies by multiple percentage points.
Active addresses & new addresses are back on the rise for #Litecoin. Daily active addresses saw a 28% 7-day increase & new addresses saw a 54.6% 7-day increase!
Source: https://t.co/POjEVdh92n pic.twitter.com/PCbcGV7mFH
— IntoTheBlock (@intotheblock) June 19, 2023
According to Shan Belew, Litecoin’s fair value based on its network value model is over 4-digits per coin.
Markets appear to be trending towards digitally scarce bearer assets; and only a handful of cryptocurrencies fit the description.
Is digital silver next in line?
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