Bitcoin Dominance (BTCD)
Bitcoin dominance, or BTCD, is a measure of how much Bitcoin (BTC) makes up the total cryptocurrency market capitalization. It is calculated by taking the total market value of all Bitcoin in circulation and dividing it by the total market value of all cryptocurrencies in circulation. The resulting number is expressed as a percentage; this percentage indicates what portion of the entire cryptocurrency market is made up of Bitcoin.
The concept of bitcoin dominance has become increasingly important over time as more and more alternative cryptocurrencies have entered circulation. As these new coins appear on exchanges and take their share of trading volume, they contribute to overall market growth – however, due to its large size relative to other cryptos, Bitcoin remains dominant in terms of both price action and liquidity. This means that any significant changes in BTC’s price will usually create big waves across the entire crypto-market.
As such, analysts often look at bitcoin dominance when trying to make predictions about future trends for altcoins (alternative coins). If BTC’s dominance increases significantly then it may indicate that investors are shifting away from riskier investments into safer ones like Bitcoin – which could eventually lead to bearish conditions for altcoins. Conversely, if BTC’s dominance decreases then it might mean investor interest has shifted towards higher risk/reward opportunities such as smaller cap coins – leading potentially bullish conditions for certain alts.
Overall it can be seen that while there are different interpretations regarding what an increase or decrease in bitcoin dominance means for individual assets within the larger cryptocurrency ecosystem; understanding this metric gives us valuable insight into how funds flow throughout various sectors within blockchain industry – allowing us better understand overall sentiment within crypto markets
