Bitcoin market dominance or BTC’s percentage of the total market cap may not be the best way to get an accurate picture of the market, according to new research.
Market Share vs Market Dominance
There are certain Bitcoin metrics that we all understand; the price, the circulating supply, the market cap. And then there’s market dominance, which is BTC’s percentage of the total market cap of all cryptocurrencies. But what if we’ve all been wrong on this last one?
When considering Bitcoin’s ‘Market Dominance’, we generally go to the measure used by CoinMarketCap. But whilst comparing BTC to the total market cap certainly gives us market share, maybe ‘dominance’ should include other factors?
That was the theory John-Paul Thorbjornsen investigated, after feeling the current 50% ‘dominance’ score didn’t give a true representation. A better reflection of Bitcoin’s dominance, he suggested, might include some measure of liquidity, or daily trading volume.
Pareto Distribution and Power Law
His research revolved…