Cryptocurrency Landscape Shifts: Bitcoin Influence Decreases While Altcoins Surge - How Far Can the Downward Trend Extend?
In the ever-evolving world of cryptocurrencies, a notable shift has been observed recently. The bitcoin dominance, which measures the cryptocurrency's market share against the total market cap of all altcoins, currently stands at 57.79%. This dip indicates a growing interest in altcoins such as XRP, Binance Coin (BNB), and Solana.
This trend is further supported by the recent influx of institutional investments. Over the past few days, institutional investors have poured over 2.2 billion US dollars into Ethereum ETFs. Notably, these investments have been accumulated on three consecutive days, with inflows of 1.02 billion, 523.92 million, and 729.14 million US dollars. These investments primarily originate from institutional wealth managers and companies, particularly in the USA.
The rise of altcoins is not solely driven by institutional interest. Dom Harz, co-founder of BOB, has stated that traders are rotating into altcoins in anticipation of SEC approval for new spot ETFs. This sentiment is echoed by the bullish long-term outlook analysts have for bitcoin.
The past week has seen ETFs experiencing six straight days of inflows, pulling in over 2 billion US dollars. One of the standout performers among these ETFs is Binance's BNB, which is currently trading for $996, up about 5% and setting a new all-time high. BNB's success is mirrored by Solana, which has also seen a boost from corporate treasuries buying billions worth of SOL. Solana is trading for $248, up almost 6% in the past day.
The Federal Open Markets Committee's decision to lower federal interest rates is also contributing to bitcoin's performance. After the announcement, bitcoin price gained 1% and reached a recent peak of just shy of $118,000 on Thursday morning. However, 7% of the total bitcoin supply now sits in corporate and government treasuries, suggesting that bitcoin could potentially serve as a safe haven in times of economic uncertainty, leading to potential USD devaluation.
Despite the current shift towards altcoins, a survey on Myriad, a prediction market, shows that users are bearish on bitcoin dominance as enthusiasm for altcoins builds. At the time of writing, 53% of users think bitcoin dominance will slip further to 53% before it climbs back to 63%.
In the short term, altcoins are outperforming bitcoin and gaining larger returns ahead of expected SEC approvals of crypto ETFs. However, the long-term outlook for bitcoin remains bullish, with John Glover, chief investment officer at bitcoin lender Ledn, forecasting bitcoin price to reach circa $140K to $145K by year-end.
Solana, which has seen a 35% increase over the past month, is one of the biggest gainers among top assets. At the time of writing, XRP is trading for $3.12, up 3% in the past day. Bitcoin dominance was last that high in the middle of July, when bitcoin set a new all-time high above $112,000.
As the cryptocurrency market continues to evolve, it's clear that the focus is shifting from bitcoin to altcoins. Whether this trend continues remains to be seen, but one thing is certain: the world of cryptocurrencies is always full of surprises.
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