Bitcoin has reclaimed its dominance in the cryptocurrency market, hitting a three-year high fueled by robust interest in U.S. exchange-traded funds (ETFs).
According to data from CoinMarketCap, Bitcoin now commands nearly 55% of the $2.4 trillion market for virtual currencies, a level not seen since April 2021. Major coins trailing behind Bitcoin include Ether (ETH), stablecoin Tether, Binance’s BNB, and Solana (SOL).
The recent surge in Bitcoin’s dominance can be attributed to the success of newly launched U.S. spot ETFs, with companies like BlackRock and Fidelity Investments quickly amassing nearly $56 billion in assets. This influx of institutional investment briefly propelled Bitcoin to a record high of $73,798 in mid-March.
While Bitcoin’s price has since dipped by around 6%, smaller digital assets have experienced more significant declines of over 30%, impacted by fading hopes of a looser U.S. monetary policy, which typically stimulates speculative investments.
Benjamin Celermajer, director at digital-asset investment manager Magnet Capital, noted, “Allocations to the U.S. ETFs by institutional investors have resulted in Bitcoin performing very strongly relative to the rest of the market.”
Furthermore, the introduction of Hong Kong-listed ETFs for Bitcoin and Ether has further boosted their values, with Bitcoin climbing by 4.3% to $66,575 and Ether by 6.2% to $3,260. This upward momentum has also lifted other cryptocurrencies such as Polygon, Cardano, and Dogecoin.
The cryptocurrency market is now closely watching the upcoming halving event, expected around April 20, which will halve the new supply of Bitcoin. While previous halvings have historically led to price increases, the impact of the upcoming event remains uncertain amid Bitcoin’s recent peak performance.
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