August 22 edition of Forbes reported that the share of the bitcoin total market capitalization of cryptocurrencies can be more than 90%. Main aggregators crypto data indicate the level of dominance of about 70%, but analysts Arcane Research estimated that the real level may be much higher.
The representative of the company Arcane Research argues that for a more accurate assessment of the dominance of bitcoin in the equation must be enabled liquidity. He said
You can sell one token for $ 3, but what happens if you want to sell 1 million? Without taking into account liquidity, market capitalization becomes meaningless.
Using trading volume as a simple indicator of liquidity, the company Arcane Research recalculated the volume-weighted market capitalization of the cryptocurrency market. The result was more than 90% domination of bitcoin – 20% higher than other estimates. The researchers conducted two parallel analyses – one based on data from CoinMarketCap, and the other was limited to 10 cryptocurrency exchanges, Bitwise identified Asset Management as having a reliable (i.e. not traded or manipulated) volume.
The company Arcane Research has excluded stable coins out of the equation, arguing that such assets are tied to the currency not compete with cryptocurrencies that have independent intrinsic value.
The researchers argue that this high level of dominance in the market makes it impossible for competition from other cryptocurrencies. According to them:
It is very difficult to compare and contrast the projects focused on different niches. As for altcoins, it can be argued that the very idea of measuring the relative strength of the various coins and tokens falsely suggests a competition between the complementary decisions.
As reported earlier this month, a supporter of bitcoins and former trader on wall street Max Keiser said that “the time of altcoins coming to an end”.
Currently, the dominance of bitcoin is estimated to CoinMarketCap, is nearly 70%, which is the highest rate from April 2017.