Dominance Debrief — 2021 Year in Review

It’s been a momentous year for cryptocurrencies at large, especially bitcoin. From earning a place on the balance sheets of leading corporations to hitting an all-time high above $68k to the creation of the first-ever bitcoin exchange-traded fund, 2021 was certainly a key year for bitcoin’s growth and adoption.

Bitcoin’s share of the total market capitalization started 2021 out strong at ~70% on January 1 but has since steadily tapered off to close the year out at ~38%. While some might argue the fall of BTCDOM represents its decline as a relevant market indicator for trading, the opposite is true — dominance trading is here to stay, and bitcoin dominance is no exception. 

“A reason why we’re seeing a decline in BTCDOM is simply because there is a much larger variety of cryptocurrency offerings now,” said Michal Cymbalisty, co-founder of Domination Finance. “The L1, L2, and DeFi landscapes have been heating up this year, resulting in a growing number of competing altcoins entering the market. Accordingly, bitcoin’s share of the total market cap has lessened.”

With the rise of altcoins challenging BTCDOM, ETHDOM has been making steady gains, gradually increasing from ~11% to ~20% over the past 12 months. This has occurred amidst growing retail and institutional interest in the investment potential of altcoins, as seen through CME’s new micro ether futures as well as a surge in DeFi’s TVL to over $245 billion. 

“Traditional finance and mainstream audiences have been eying the innovation happening in crypto this year,” said Adrian Kolody, co-founder of Domination Finance. “Looking ahead to 2022, as innovation thrives and institutions continue to enter, crypto will be further legitimized in the larger financial markets on a global scale.”