Overview

According to SwissOne Capital, the stability of Bitcoin's dominance rate is now threatened by the current U.S. interest rate cuts, which the firm states are positively correlated with Bitcoin's market performance.

Key Points:

• The dominance rate of Bitcoin (BTC) has escalated from 38% to 58% over the past two years, according to TradingView data. This signifies Bitcoin's outpacing of the broader market increases, which doubled the total market value of digital assets to exceed $2 trillion.
• The ongoing easing cycle initiated by the Federal Reserve, which recently implemented a reduction of 50 basis points, threatens to plateau Bitcoin's dominance rate growth.

"Bitcoin Dominance is positively correlated to the Fed Funds rate," SwissOne Capital states, citing historical trends showing diminished dominance during previous rate-cutting cycles.

Additional Insights:

• Historical data reveal that the dominance peaked over 70% before the onset of the easing cycle in 2019.
• There is now minimal potential for the dominance rate to rise significantly as rate decreases are expected to continue through the year, indicating limited upward momentum for Bitcoin's share in the crypto market.

Conclusion

The current fluctuations in Bitcoin's dominance could signal a paradigm shift in the cryptocurrency landscape, influenced heavily by U.S. monetary policies.