The Bitcoin dominance, meaning the share of Bitcoin in the total cryptocurrency market, could, according to experts and current forecasts, persist for another 15 to 20 years and lead to an outperformance against altcoins.
Reasons for Continued Dominance
A key factor in this assessment is the sharply increased number of active altcoin projects. While around 3,000 projects were active in previous bull cycles like 2017/18, there are now about 36.4 million. This oversupply makes it difficult for many altcoins to generate enough capital and demand to surpass Bitcoin.
The Role of Crypto ETFs
The introduction of crypto ETFs is eagerly anticipated, yet analysts doubt these products will trigger broad demand for altcoins. Institutional investors have primarily been waiting for ETFs linked to Bitcoin; a comparable effect for other cryptocurrencies is considered unlikely.
Despite a strong price increase of Bitcoin up to record highs, e.g., around the mark of 110,000 USD, many altcoins are lagging behind. However, some observers see opportunities for a so-called “altcoin season” when specific price levels are reached – an additional rise of altcoins by about 20% could trigger this phase. However, this remains uncertain given the fundamental market structure.
Large financial institutions like JPMorgan also predict continued dominance of Bitcoin over Ethereum and other altcoins by 2025 due to its role as a digital hedge, as well as significant institutional investments and technical advances in Layer-2 solutions.
In summary:
- The long-term dominance of Bitcoin in the crypto market is expected to last for decades.
- The enormous supply of altcoin projects hinders their sustainable success.
- Crypto ETFs are likely to primarily facilitate access to Bitcoin, but less so encourage a broad upturn among altcoins.
- Despite short-term opportunities, the probability of a pronounced “altcoin season” is currently low.
For investors, this means: The market structure currently favors a focus on Bitcoin as the leading currency of the crypto market with stable or growing dominance over other coins in the near future.