The CoinSpeech team has gathered the most critical insights from Benjamin Cowen’s recent thought-provoking discussion on Bitcoin dominance. For a more detailed analysis, check out his new video embedded below.
Bitcoin To Reclaim Market Share
Benjamin Cowen revisits his early 2022 thesis that “Bitcoin will slowly reclaim market share until looser monetary policy arrives.” This has largely played out, with Bitcoin dominance rising from roughly 39% to 55% today, validating Cowen’s theory that Bitcoin dominance should increase irrespective of BTC/USD direction.
Stablecoins’ Impact In Bitcoin Dominance
Cowen emphasizes the importance of excluding stablecoins when analyzing Bitcoin dominance. “If you look at the Bitcoin dominance excluding stablecoins, you can see that in fact, Bitcoin dominance bottomed in May of 2021 and has been trending upwards ever since.”
Ethereal Anomalies
Cowen identifies an interesting anomaly where Ethereum (ETH) market performance diverged from other altcoins. Despite ETH/BTC being up 10% since the last video, Bitcoin dominance has increased. He explains that historically, “Ethereum is the last thing to fall in the same way that it’s the last to go up.”
Pivotal Federal Reserve Actions
In 2019, the Federal Reserve’s decisions acted as a significant catalyst. “2019 was a pivotal year… the FED started to cut interest rates,” Cowen notes. Drawing parallels to today, the comparison between 2019 and current monetary policies reveals striking similarities.
Is Altcoin Performance Cyclical?
Cowen discusses the challenges of altcoin performance, warning that most altcoins are “oscillators at best” against Bitcoin. Citing examples like Polkadot (DOT) and ADA, Cowen highlights how these assets have bled back to Bitcoin, emphasizing that historical trends suggest further declines are likely.
Retail Interest’s Role in Alt Seasons
For an alt season to truly materialize, retail interest must significantly increase. Cowen indicates, “You need people to come in mass to make Bitcoin dominance durably go down. If people aren’t here, then the dominance keeps going up.”
Following the Trend
Cowen warns against short-term thinking. “If you can ride the trend for three years, it doesn’t matter if you ride it for two years and 10 months or three years,” indicating the long-term trend of Bitcoin dominance is not easily swayed by short-term market fluctuations.