There have been many cases where Bitcoin’s dominance in the cryptocurrency market has been questioned. With the advent of the bear market, many in the cryptocurrency system have also commented that ‘Bitcoin is dead.’ According to recent research by John-Paul Thorbjornsen however, Bitcoin is still going strong with a market dominance of more than 80 percent. The researcher arrived on the figure by taking Bitcoin’s liquidity into account.
According to the graph above, it is clear that Bitcoin is much more dominant than Ethereum and other coins, when it comes to liquidity. John Paul stated in his research,
“It is clear that Bitcoin is the dominant currency when taking liquidity into account. In terms of share, it is consistently over 80% and trending up. In fact, just taking into account the Top 5 coins, Bitcoin (the 20%) captures over 85% of the market — thus it is a Pareto distribution, and actually much stronger. This is only testament to how strong the Schelling Point around Bitcoin is.”
The research also claimed that CoinMarketCap’s market dominance charts are flawed because they do not factor in liquidity. John-Paul spoke about the incorrect ’55 percent dominance’ tag quoted by luminaries in the cryptoverse, including Ethereum’s Vitalik Buterin. The comment in question was,
“Bitcoin was for example the first cryptocurrency and originally…it had 100 percent of the market share. Then it went to 90 and now it is at 55.”
According to the research, the liquidity of Bitcoin had to be calculated as a metric and hence, it was deduced that they were supposed to be multiplied together to form another metric called Volume-Weighted Cap. This is the factor that suggests Bitcoin’s overwhelming dominance over other cryptocurrencies in the market.
While Bitcoin’s dominance in terms of market share was asserted, the cryptocurrency also received another good news this week when it was found that BTC’s hash rate had reached a 4 month high. Sources showed that the hash rate was clocked at 52 quintillion, while the last peak was in November 2018 when the hash rate recorded was 54 quintillion. The highest Bitcoin hash rate ever recorded was in August 2018, when it spiked to a record 62 quintillion.
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