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Bitcoin, the top cryptocurrency by market cap, and Tether, the most popular stablecoin, have boosted their share of the total crypto market. Measured as a percentage of the total crypto market capitalization, Bitcoin dominance spiked to nearly 50% early on Saturday morning.
At around the same time, USDT dominance surged to over 8.2%.
Bitcoin Dominance Rises as Investors Flee Altcoin Market Crash
As is often the case with rises in Bitcoin dominance, Saturday’s increases coincided with a major altcoin market crash.
The reasons behind the surge in Bitcoin dominance are twofold.
On one hand, the price of BTC has remained resilient compared to many altcoins. With the price of tokens like Solana and Polygon plummeting by over 20% overnight, their market cap shrunk rapidly.
As a result, Bitcoin’s relative share of the total crypto market cap has risen.
At the same time, bitcoin’s comparatively stable price offers investors a degree of protection. This drives more funds out of altcoin markets and into bitcoin as investors seek refuge from falling prices.
BTC’s dominance rate has been steadily rising since November. And it increased rapidly during the March U.S. banking crisis. Following Saturday’s surge, bitcoin dominance is at its highest level since 2021.
TUSD Depeg Boosts Tether
While bitcoin’s strong liquidity makes it an attractive way for crypto traders to exit altcoin markets, stablecoins also offer an alternative risk aversion strategy. And as the most popular dollar-pegged stablecoin, USDT provides an easy way to exit crypto market volatility without fully off-ramping into fiat currency.
Another factor that could have influenced the rise in USDT dominance is the worrying price deviations of fellow dollar-denominated stablecoin TrueUSD (USDT).
On Saturday morning, the coin became temporarily depegged from the dollar, falling as low as $0.9951.
The sudden dip in value was followed by an announcement from TrueUSD stating that TUSD mints via Prime Trust would be “paused for further notification.”
“TUSD minting and redemption services remain unaffected and will continue to operate as usual. We want to assure you that our partnerships with other banking institutions remain intact, allowing for seamless transactions,” the company tweeted.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
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