Bitcoin’s share of the market (Bitcoin Dominance) has been steadily declining for two years now, since September 2019, when it was almost 70%.
Bitcoin Dominance fell below 40% in May. The smaller share of BTC was only in January 2018, during the very first market skyrocket. At the same time, the share of Ethereum is constantly growing and already amounts to almost 20%. The market shares of Cardano (ADA) are also growing – to almost 4.4% and Binance Coin (BNB) got almost 3.7%.
In practice, this means that investors do not leave the cryptocurrency market, but prefer to shift from the oldest cryptocurrency asset to altcoins. However, analysts believe that bitcoin can still surprise us and will update the all-time high, which was set in April 2021 at $64.8K. This forecast is supported by the latest speech by Jerome Powell, the head of the Fed.
He noted that the US economy no longer needs support from the Fed, but he did not say how much this support would be reduced and within what time frame. According to analysts, this will not happen until the end of the year. Interest rates do not rise, so investors again turned to the cryptocurrency market as the only one where they can earn money under these conditions.
This is just one of the fundamental factors in support of bitcoin. The second could be the launch of bitcoin ETFs, exchange-traded funds. Several applications for launching bitcoin ETFs are pending approval in the SEC, including applications from the largest players such as ARK Invest, One River, VanEck, and Fidelity. According to a leak from one of these funds, the first bitcoin ETF may be approved in October. This will surely push the growth of both the entire cryptocurrency market and bitcoin itself.
In the midterm, BTC may rise even above the $100K level which is pointed in most forecasts. The fact is that the Taproot update is expected to be fully released in the bitcoin blockchain in the fall. A successful update will add smart contracts to the blockchain. This could make bitcoin the largest player in the field of DeFi (decentralized finance) and yield farming.
In the last two years, these segments brought maximum gains to the participants of the cryptocurrency market. If bitcoin competes on equal footing with existing platforms, such as Ethereum, Cardano, Solana, then it is highly likely that both large institutional investors and retail will make their choice in its favor. The influx of investment will lead to a rapid rise in the price of BTC.
According to Raoul Pal, co-founder, and CEO of Real Vision, a financial media company, bitcoin could rise from 400% to 700% to a price above $400K. Raoul Pal in his forecast relies not only on fundamental factors, such as rising inflation in the United States but also on technical ones. He points out that bitcoin’s growth cycle will last for about three months, and during this period BTC will grow fivefold.