Bitcoin (BTC) dominance has always been one of the first pieces of information displayed on cryptocurrency ranking websites like Coin360 and CoinMarketCap. Although it seems a consolidated and straightforward metric, there’s an argument that the market share indicator makes less sense as time goes by.
One point to note is the staggering growth of the stablecoin industry. As Tether (USDT) and USD Coin (USDC) have seen their market capitalization explode over the past year, should they also be aggregated on the same ‘dominance’ rankings?
Regardless of the answer, crypto investors need to understand that merely looking at BTC dominance to decide whether or not to change altcoin allocations within a portfolio has become less effective.
The free float problem
Simplicity is probably the primary reason for the popularity of the reason behind the market capitalization metric. Even investors new to the game can understand that multiplying the last trade price by the number of outstanding coins allows one to