Bitcoin's Dominance of Crypto Market Reaches Highest Level Since 2021

investopedia.com:

Bitcoin's price has been on a tear since election night, hitting a new all-time high of over $93,000 on Wednesday before retreating back below $90,000.

While alternative crypto assets also tend to move in the same direction dictated by bitcoin, the altcoins haven't been able to keep up with the world's largest and most popular cryptocurrency so far in this bull run. In fact, the Bitcoin Dominance Index (BDI) hit a new cycle high of 61.39% on Wednesday, according to TradingView.This is the highest level seen since March 2021.

The BDI measures the total value of the bitcoin network as a percentage of the value of all crypto assets in the world. It is a rather crude way of measuring things, and there are a few different specific measurements out there that include or exclude specific types of crypto assets. For example, it wouldn't make much sense to include stablecoins, which are pegged to the U.S. dollar, in this sort of data.

For some, the ETH/BTC trading pair is another option for illustrating bitcoin's dominance (or lack thereof), as Ethereum is viewed by some as the main alternative to Bitcoin. That said, while the spot ether exchange traded funds (ETFs) have performed better than ever in terms of inflows over the past week, ether has already reversed just about all of the gains it made against bitcoin following Election Day in the U.S.

So, why is this happening? In the past, bitcoin led the way for the crypto market before alternatives joined the party and eventually outperformed the longest-standing crypto asset. There may be different dynamics at play now due to various technical developments around Bitcoin such as layer-two networks and Ordinals. Layer-two networks can enable many of the features found on