Bitcoin Dominance Dips as Altcoins Rally Ahead of ETF Approvals

Bitcoin’s dominance—the ratio of its market capitalization to the entire crypto market—declined to 57.79% on Thursday morning as traders pivoted capital toward altcoins like XRP, BNB, and Solana. This shift comes amid anticipation that the U.S. Securities and Exchange Commission (SEC) will approve a broader range of crypto exchange-traded funds (ETFs), fueling short-term optimism for alternative digital assets. Despite the rotation, Bitcoin itself showed resilience following the Federal Open Markets Committee’s decision to lower federal interest rates by 25 basis points, initially holding steady before climbing to nearly $118,000, its highest price in over a month.

John Glover, Chief Investment Officer at Bitcoin lender Ledn, emphasized that Bitcoin’s initially muted reaction to the rate cut does not diminish its long-term potential. ‘I’m forecasting a BTC price of circa $140K to $145K by year end,’ Glover told Decrypt. ‘The rate cuts will help to push this narrative as money moves to BTC for safe haven among expectations of a USD devaluation.’ This sentiment underscores a broader analyst consensus that macroeconomic factors, including potential currency devaluation, continue to favor Bitcoin as a store of value.

While Bitcoin’s long-term outlook remains bullish, altcoins have captured immediate attention with significant gains. XRP rose 3% in the past day to trade at $3.12, while Binance’s BNB surged approximately 5% to $996, briefly surpassing $1,000 to set a new all-time high. Solana, bolstered by corporate treasury purchases worth billions of dollars, climbed almost 6% to $248 and has gained 35% over the past month, making it one of the top performers among major cryptocurrencies. This altcoin rally reflects trader speculation that the SEC will expand its ETF approvals beyond Bitcoin, creating new avenues for investment and liquidity.

Despite the altcoin excitement, institutional commitment to Bitcoin remains robust. Dom Harz, co-founder of BOB, noted, ‘ETFs alone have seen six straight days of inflows this week, pulling in over $2 billion, while 7% of total supply now sits in corporate and government treasuries.’ This sustained institutional demand highlights Bitcoin’s entrenched position as the most secure and proven digital asset, even as short-term market dynamics favor altcoins. Harz added, ‘Short-term statistics may show that Bitcoin dominance is slipping… but it’s important to remember that Bitcoin remains the most secure network, the most proven digital asset, and the one with the deepest institutional conviction.’

Market sentiment, as gauged by prediction platform Myriad—owned by Decrypt parent company Dastan—indicates a bearish short-term outlook for Bitcoin dominance. Currently, 53% of users predict it will drop further to 53% before potentially recovering to 63%, a level last seen in mid-July when Bitcoin set a then-record above $112,000. This expectation aligns with the ongoing altcoin enthusiasm but contrasts with the unwavering analyst confidence in Bitcoin’s year-end performance.

The interplay between Bitcoin’s institutional backing and altcoin speculative rallies defines the current crypto landscape. While traders capitalize on near-term opportunities presented by potential ETF expansions, the foundational strength of Bitcoin, evidenced by multi-billion-dollar ETF inflows and treasury allocations, suggests a resilient upward trajectory. As the market navigates regulatory developments and macroeconomic shifts, the coexistence of Bitcoin’s stability and altcoin volatility will likely continue to shape investment strategies and market dynamics through year-end.