The argument’s been made before that Bitcoin dominance has stopped being a useful indicator of the cryptocurrency’s strength in the market. There’s never been more convincing evidence than during 2021.

Despite a mid-year slump, the price has again surpassed the $52,000 mark that had everyone feeling extra bullish in the spring. As a result, its market cap was up 51.8% compared to the start of the year.

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Meanwhile, BTC global crypto market dominance has, rather inevitably, dropped steadily as more coins and blockchain networks join the fray. Measured against the rest of the global crypto market, BTC dominance now sits at 42%. That’s a drop of 38.2% compared to the start of the year.

Some sources, like the Real Bitcoin Dominance Index, have argued that the correct way to measure the indicator excludes ICOs, stablecoins and proof-of-anything-but-work coins.

If you do that, BTC dominance sits at 66%. Even so, there’s no getting around the fact that the RBDI has lost 17 percentage points since the start of January.

BTC market dominance could edge higher on the expectation that the SEC will approve a Bitcoin ETF. 

Just yesterday Bloomberg senior analyst Eric Balchunas said on Twitter that he thought a Bitcoin futures ETF could be approved by the SEC in the next two weeks.

It wouldn't have quite the same effect on the market as if a physically-backed ETF were approved, but it's been enough to give the price some extra buoyancy since the start of the month.

The argument’s been made before that Bitcoin dominance has stopped being a useful indicator of the cryptocurrency’s strength in the market. There’s never been more convincing evidence than during 2021.

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