Bitcoin Dominance Rises as Traditional Markets Plunge

Bullion Bite
Bitcoin Dominance Rises as Traditional Markets Plunge

Bitcoin has experienced a surge in price, reaching over $26,000 this week, as traditional finance markets have taken a hit. This has led some to consider bitcoin as a safe haven asset. Although the cryptocurrency is limited to 21 million coins, and supply is fixed, it remains a volatile asset. Nonetheless, investors see bitcoin's appeal during this period of market turmoil.

Bitcoin’s dominance is also surging, reaching 46.59% of the total value of the cryptocurrency market as of March 17, representing an increase of nearly 10% over the past week. This consolidation in the cryptocurrency market suggests a subjective “flight to quality.” While bitcoin's dominance is not as high as it was in 2020, it is still considerable, and investors are putting their money into the safest bet they have.

Despite the volatility of bitcoin, it is not as volatile as some other cryptocurrencies. Investors are looking for safe havens, with traditional markets in disarray. Customers of regional banks have withdrawn their funds and deposited them into large banks like JPMorgan and Citibank.

The surge in bitcoin’s dominance suggests that investors are looking for stability in an unstable market. While bitcoin is not a safe bet, it is proving to be a better bet than other cryptocurrencies. In a diversified portfolio, it may be worth considering investing in bitcoin, but investors should be aware that safe havens don't always stay safe.

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