Although the value of Bitcoin has been rising steadily, its market share has fallen by more than 30%.

Golden Finance News - Bitcoin's value has been rising steadily in 2016, reaching a record high of $25.5 billion in the first quarter of 2017. At the same time, many other cryptocurrencies are growing in market value. In the past four months, Bitcoin's market share has fallen by more than 30%.

Bitcoin value advantage falls to all-time low

Bitcoin's market capitalization is far higher than any other cryptocurrency in existence. Market capitalization is the total market value of all Bitcoins on all major exchanges at a specific point in time. Capitalization analysis is often used as a statistic that roughly shows the net worth of a particular market.

Initially, Bitcoin’s value held 80-90% of the market cap dominance. Now, compared to other cryptocurrencies, Bitcoin’s dominance has dropped to an all-time low of 53%.

(The market share of Bitcoin value has fallen to 53%. Image source: Golden Finance)

Rising market capitalization of altcoins reduces Bitcoin's market share

(The increase in the market value of competing coins reduces the market share of Bitcoin. Image source: Golden Finance)

In the first month of 2017, Bitcoin dominance was around 87% and then started to decline in the following months. Other cryptocurrencies such as Ethereum, Dash, Litecoin, Ripple, Monero, etc. have seen major price increases in the past four months.

For example, in January, one Ether (ETH) was worth $8 and the currency’s market cap was $721 million. Now one ETH is around $96, and Ethereum holds a market cap of $8.8 billion. Growth like this has been seen in many altcoins.

Bitcoin’s market share was 87% in January 2017. On May 7, 2017, the digital asset’s dominance dropped to an all-time low of 53%.

(Vinny Lingham believes that the market cap does not apply to digital currencies. Image source: Golden Finance)

Even with the decline, some argue that market cap isn’t the best way to measure Bitcoin’s value. Civic founder and entrepreneur Vinny Lingham has written a detailed article on the issue, arguing that market caps are designed for stocks and are not constructive for Bitcoin’s actual valuation. He wrote in a post last spring titled “Deconstructing Bitcoin’s Market Cap,”

“Now, to be clear, this definition of market cap is intended to apply to stocks, not commodities, and certainly not digital commodities.”

There are also many who believe that the share of Bitcoin’s value and other dominant cryptocurrencies should also be lightly adjusted upwards. Skeptics believe that most of the high-value coins are actually only traded on exchanges and are traded within a day and abandoned after a few days or weeks. Those who hold this view believe that most altcoins are only used for transaction purposes and have not yet seen any real-world use value.

(Bitcoin is being used by 88% of customers for payment, while other competing currencies are only around 5% at most. Image source: Golden Finance)

For example, in terms of actual usage, Bitwala has just stated that not too many people are actually using altcoins on their platform. Another example of altcoins lacking real-world usage comes from Living Room Of Satoshi, where according to a chart from the company, Bitcoin is now being used by 88% of its customers for payments, while other altcoins top out at around 5%.

However, concerns remain over whether Bitcoin’s value can maintain its market dominance amid rapidly growing prices of rivals.