Bitcoin's Market Dominance Is of Over 90% When Measured by Liquidity, Research Suggests

Neil Dennis

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.

Bitcoin Whale Reportedly Risks 800 BTC for $0.01 Payout in Dogecoin

A bitcoin whale has supposedly risked a total of 800 BTC, worth around $5.8 million, to help the cryptocurrency remain at the $7,200 mark in a bid to win a bet he made on social media.

A Twitter exchange between Dogecoin supporter Samu and bitcoin whale Joe007 shows that both agreed to bet on bitcoin’s future price, with Samu agreeing to pay 5 million DOGE (around $11,000) to the whale if BTC traded above $7,100, and the whale agreeing to pay Samu the same amount if it was below $7,100 at 13:00 UTC on December 12.

The BTC whale ended up winning the bet as the price of the flagship cryptocurrency didn’t drop below the agreed-upon mark. Some of those watching the thread, however, noted that something seemed to be going on before the bet’s deadline expired.

The bet was made according to the price of the Bitfinex cryptocurrency exchange, and a trader soon alleged on social media the BTC whale could’ve placed an 800 bitcoin order to “defend” the $7,200 so the cryptocurrency’s price wouldn’t dip.

While it isn’t possible to tell whether Joe007 was the one behind the 800 BTC order, the whale seemed to warn Samu before the bet was made that he was extremely confident he was going to win, tweeting out “you really don’t want to make this bet, believe me…”

After the deadline the posts suggesting market manipulation came out so Samu said he “got revenge” on the bitcoin whale cheating, by offering to pay him only 6 DOGE, currently worth about $0.013.

The Dogecoin addresses Joe007 showed as the destination for the funds currently has little over 10,000 DOGE in it, worth close to $22. Some argued Samu should have paid the funds as no terms were defined in the bet, while others agreed with him.

Featured image via Unsplash.