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Risk Flight? Bitcoin Dominance Hits 9-Week High
Bitcoin's percentage of the crypto market is up – a sign that investors are likely switching their money from alternative cryptocurrencies.
Updated Sep 13, 2021, 8:06 a.m. Published Jun 27, 2018, 3:15 p.m.
Bitcoin's share of the cryptocurrency market hit a 2.5-month high today – a sign that investors are likely switching their money from alternatives into the industry's most widely traded asset.
As tracked by CoinMarketCap, the gauge rose to 42.74 percent earlier on Wednesday, the highest level since April 14, and was last seen a tad lower at 42.5 percent.
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The Dominance Index is an indicator that tracks the percent of the total cryptocurrency market capitalization contributed by the leading cryptocurrency. So, a rising dominance rate essentially means the demand for bitcoin is greater than the demand for other innovations.
A flow toward bitcoin is usually seen at the start of the bull run, as it's a common route for fiat money to enter the cryptocurrency market.
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For instance, BTC's dominance rate rose from 38 percent to 66.5 percent in the six months to December 2017 – a time in which the cryptocurrency rallied from $1,760 to $20,000. However, it also tends to rise during periods of risk aversion – when investors move out of high-risk alternative cryptocurrencies and into bitcoin, and then possibly on to fiat currency.
And it's the latter scenario that we likely are witnessing currently. In the last seven weeks, BTC has crashed from $9,990 to $5,755 and still, the BTC dominance rate has gone from 35.78 percent to 42.75 percent.
So, the writing on the wall is clear: right now, a lot of investors prefer cash over any of the cryptocurrencies, bitcoin included.
If prices start to rally along with the BTC dominance rate, however, it could mean the crypto markets have bottomed out, finally finding a floor after months of decline.
Chalk arrows image via Shutterstock
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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Solana CME Futures Fell Short of BTC and ETH Debuts, but There's a Catch
When adjusted for asset market capitalization SOL's relative futures volume looks better, K33 Research noted.
What to know:
- Solana's SOL futures began trading on the Chicago Mercantile Exchange (CME) on Monday, with a notional daily volume of $12.3 million and $7.8 million in open interest, significantly lower than the debuts of bitcoin (BTC) and ether (ETH) futures.
- Despite the seemingly lackluster debut, when adjusted to market value, SOL's first-day figures are more in line with BTC's and ETH's, according to K33 Research.
- Despite the bearish market conditions, the launch of CME SOL futures offers new ways for institutions to manage their exposure to the token, said Joshua Lim of FalconX.
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