New: Wallet recovery made easy with Ledger Recover, provided by Coincover

Get started

Up your Web3 game

Ledger Academy Quests

  • Test your knowledge
  • Earn POK NFTs
Play now See all quests

Bitcoin Dominance Meaning

Nov 27, 2023 | Updated Nov 27, 2023
Bitcoin dominance is the ratio between Bitcoin’s market cap and the market cap of the entire cryptocurrency market.

What is Bitcoin Dominance?

Bitcoin dominance (also called BTC dominance or BTCD) is a metric for the relative share of Bitcoin compared to the overall cryptocurrency market.

At one point, Bitcoin commanded close to 100% share of the cryptocurrency market. BTC dominance significantly plummeted with the advent of  new altcoins on the  global crypto market. Bitcoin dominance declines when altcoins amass a larger portion of the crypto market, and appreciates when Bitcoin performs better than altcoins. However, fluctuation in this metric does not necessarily correlate with its intrinsic value, nor does it imply a rapid capital inflow. Instead, it is simply a metric based on Bitcoin’s current price and its circulating supply.

Since BTCD is a ratio and not an absolute value, it is often not directly influenced by bullish or bearish trends. If the value of Bitcoin declines or appreciates at a similar rate as altcoins, the ratio will likely remain unchanged, even if Bitcoin’s value fluctuates. However, if the value of Bitcoin decreases while that of altcoins increases or remains the same, Bitcoin’s market share percentage is likely to drop.

How is BTC Dominance Calculated

BTC dominance is made up of two factors: Bitcoin’s market capitalization or market cap, and the global crypto market cap. It simply represents the percentage of Bitcoin’s market capitalization versus the total crypto market cap. It is calculated by dividing Bitcoin’s market cap by the total market cap of all cryptocurrencies. 

Bitcoin Market Cap (%) = Current Market Price x Circulating Supply

Bitcoin Dominance = Bitcoin Market Cap / Total Market Cap x 100

For instance, say Bitcoin’s market cap is $1 trillion, and the total cryptocurrency market cap is $3 trillion. Bitcoin’s dominance would be 33.33% because Bitcoin accounts for a third of the entire crypto market’s value.

Hardware Security Module (HSM) 

A Hardware Security Module (HSM) is a hardware unit that safeguards and manages cryptographic keys.

Full definition

Off-Chain Transaction

Off-chain transactions is a transfer of value or data, including transactions, that occurs outside a given blockchain network.

Full definition

Rug Pull

A rug pull is a type of crypto scam when founders of a project bring in investors to inflate the value of a project, but later pull their inflated funds and abandon the project, leaving…

Full definition