Bitcoin Dominance Actually Much Stronger, Accounts for Over 80% Share & Trending Up


A few years back Bitcoin has been the only digital asset in the cryptocurrency space with a market share of 100 percent, having no competitors around. Since then more than 2,000 digital assets have made their way into crypto.

According to the data provided by Coinmarketcap, BTC dominance has now dropped down to just above 50 percent. However, JP Thor who has written a medium article on Bitcoin’s true market dominance argues the market cap on CMC is just the market price multiplied by circulating supply which can be manipulated by pre-mined, low volumes among other things.

So, by taking liquidity into account, he derived a new metric that is Volume-Weighted Cap that shows Bitcoin has Pareto dominance on the market.

Pareto Principle, The 80/20 Rule

The Pareto principle which is also known as 80/20 rule predicts that 80 percent of the effects or output come from 20 percent of causes or input.

It is basically used where there is a number of causes and one wants to focus on the most significant factor.

Taking up the cryptocurrency trading which is practically a free market with only a few externalities, the author tested out the Parity distribution which is the “law of the vital few.” He concluded that the market spread involving market cap and volume was, in fact, a Power Law Distribution but not “strictly” Pareto.

Market Dominance

Now, taking volume into account, the author found the true dominance of the leading cryptocurrency with respect to Ethereum and others which is way higher than at CMC.

When taking liquidity into account, he finds Bitcoin is the dominant currency that consistently amounts to over 80 percent share and is further trending up.

Now, taking into account only the top 5 coins, he found Bitcoin (the 20 percent), captures the 85 percent of the market.

“It is a Pareto distribution, and actually much stronger. This is only testament to how strong the Schelling Point around Bitcoin is.”

Thor concludes that the Market Dominance by Coinmarketcap is “flawed” as it doesn't factor in the liquidity and the reported BTC dominance of 55 percent is “significantly understated.” And Bitcoin will continue to maintain a greater than 80 percent market dominance.

Live Bitcoin (BTC) Price:

1 BTC/USD =$50,082.7568 change ~ 3.05%

Coin Market Cap

$933.83 Billion

24 Hour Volume

$13.83 Billion

24 Hour VWAP

$50.14 K

24 Hour Change

$1,527.46

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