Bitcoin’s dominance in the cryptocurrency market surged during the second quarter of 2023, as altcoins experienced a difficult period of decline. According to the industry report released by CoinGecko on July 18, both Bitcoin and Ethereum continued to build on their gains from the previous quarter.
However, several major altcoins, including Binance Coin (BNB), XRP, and Cardano (ADA), suffered significant losses during the second quarter. BNB and ADA were particularly hard-hit due to being labeled as securities in lawsuits against Binance and Coinbase, filed by the U.S. Securities and Exchange Commission (SEC). This regulatory scrutiny led to a substantial decrease in their market value.
Decentralized finance (DeFi) tokens also faced a tough time during the quarter, with tokens like Uniswap, Chainlink, and Lido (LDO) experiencing double-digit losses. The metaverse and play-to-earn tokens, including popular projects like Axie Infinity, Sandbox, and Decentraland, also suffered losses of up to 40%.
Bitcoin vs altcoin
As a result of the altcoin struggles, Bitcoin’s dominance in the overall market reached a two-year high of just over 52% by late June. However, it dipped back below 50% more recently, mainly due to the altcoin rally driven by Ripple’s partial court victory. The court ruling in favor of Ripple caused a surge in XRP’s price, temporarily boosting altcoin sentiment.
Nonetheless, most of the altcoins that initially made gains following the XRP pump have since lost those gains, returning the market to a state similar to before the court ruling. CoinGecko reported that the total market cap remained relatively flat throughout the quarter, starting and ending at $1.2 trillion. As the third quarter began, the market cap continued to remain steady at the same level.
In terms of performance, Bitcoin emerged as the big winner of the quarter, outperforming other major cryptocurrencies with a gain of almost 7%. However, the average daily trading volume for BTC declined by 58.7% compared to the previous quarter.
The report highlighted that despite a strong showing in Q1, Bitcoin’s performance still surpassed that of most major asset classes in Q2, only trailing behind the NASDAQ and S&P500. Bitcoin’s resilience and relatively stable performance continued to reinforce its position as the dominant player in the crypto market.
With many altcoins, except for XRP, continuing to face challenges, hopes for an early “altseason” have dwindled. The prolonged dominance of Bitcoin indicates that investors are still flocking to the pioneer cryptocurrency, viewing it as a safe haven in times of market uncertainty.
