Simple analysis of the cryptocurrency market may be vastly underestimating the dominance of bitcoin, according to recent research by Arcane Crypto and reported on its Kryptografen blog.

By taking the simple measures of bitcoin market capitalization – currently $181.8 billion – and the total market cap of all cryptocurrencies – now $264.9 billion – bitcoin would appear to have more than two-thirds (68.6%) of the cryptocurrency market share.

While high valuation is not an irrelevant measure of market dominance, Arcane believes that it’s meaningless to look at valuation without considering liquidity – and bitcoin also enjoys a massive share of the cryptoasset market’s liquidity. The researchers say:

Using a simple measure of liquidity – trading volume – to adjust the relative market capitalization, we get a more meaningful measure of the relative strength of the different coins and tokens.

Excluding stablecoins, which the researchers don’t regard as “true” cryptocurrencies, and adjusting for liquidity by calculating volume-weighted market capitalization pushes bitcoin’s market dominance beyond 90%.

Money of the Internet

Bitcoin is, therefore, best positioned to become the currency of the internet, the Arcane researchers say, despite a number of highly-successful niche projects. They conclude:

Every day bitcoin stays ahead, it becomes less likely that any other cryptocurrency can compete as a money. That is important to understand not only for investors and those building out payment infrastructure, but also those building out solutions leveraging the security of a public blockchain.