Dominance is a term used to measure the market share of one cryptocurrency in comparison to other digital assets or tokens. In the world of cryptocurrencies, dominance can be calculated by taking into account both its price and trading volume relative to other cryptos.
The most widely accepted definition for dominance is the Bitcoin Dominance Index (BDSI), which measures the percent of total cryptocurrency market capitalization that Bitcoin holds at any given moment. It does this by dividing the market cap of BTC with all other altcoins combined together. For example, if 4 coins have $100 each in terms of total supply value then BDSI will be 25%. If only 1 coin has $200 then BDSI would be 100%. This index was created as an easy way for investors and traders to gauge how much money is flowing into different crypto markets compared to others.
When talking about percentage-based metrics like domination it’s important to understand that these numbers don’t always tell us why certain cryptocurrencies are more popular than others – they just give us a sense on which coins are leading overall when it comes down purely their respective valuations and trading volumes versus those from competitors within same ecosystem or class asset type (i.e., Ethereum vs Ripple). With that said however, many times we see high levels of dominance indicating strong fundamentals behind specific projects while low values may suggest weaker support amongst users/investors relative to competitors operating inside similar space(s).
In addition there also exist various alternative methods for measuring Crypto Dominance such as Token Market Capitalization Ratio (TMCR) & Total Supply Value Percentage Share (TSVPS). The former looks at individual token prices instead entire network’s collective worth whereas latter takes sum total funds circulating among top 10 cryptos according divide them up evenly across range available currencies before calculating what fraction belongs each respectively – allowing observers compare differences between transactions happening multiple blockchains without getting overwhelmed some having higher caps than others etc.. Both TMCR TSVPS provide valuable insights regarding user participation trends changes over time within marketplace although not necessarily comprehensive enough inform decisions made investing purposes necessarily due variations data provided between sources where applicable so please consider doing additional research before making investments based solely off information found here!
