Bitcoin’s Dominance Climbs to New Highs While Altcoins Lose Ground: Matrixport
Altcoin Rally Was Shortlived
Recurring Bitcoin ETF Outflows Fail to Dent Dominance
Key Takeaways:
- Matrixport data shows Bitcoin dominance rising to 61.2%, capturing a larger share of the crypto market.
- Bitcoin outperforms Ethereum, Solana, and XRP despite economic challenges.
- The latest dominance comes amidst $1.4 billion Bitcoin ETF outflows, showing resilience despite market uncertainty.
Bitcoin's market dominance has reached 61.2%, up from 54% in December, according to financial service provider Matrixport.
According to the Matrixport insight, the increase in Bitcoin dominance reflects a major shift in investor sentiment as traders move away from altcoins and into Bitcoin amid growing macroeconomic uncertainty.
Altcoin Rally Was Shortlived
The report further highlighted key factors influencing this trend, including the Federal Reserve’s monetary policy stance and broader market volatility.
Bitcoin dominance began rising in late 2024, fueled by optimism surrounding Donald Trump’s presidential campaign. Viewed as more crypto-friendly, Trump’s policies were expected to support digital assets, attracting investors back into Bitcoin.
However, the momentum was short-lived. By December, Bitcoin's dominance temporarily dipped as altcoins saw renewed interest. That rally quickly faded after a stronger-than-expected U.S. jobs report in early January shifted market expectations.
Investors grew cautious, anticipating that the Federal Reserve would maintain a hawkish stance rather than cutting interest rates as previously expected.
This sentiment peaked on his inauguration day when Bitcoin reached an all-time high of over $109,000.
On January 29, the Federal Reserve confirmed these fears, opting to keep interest rates steady instead of initiating cuts. Fed officials cited healthy U.S. labor market data as a reason to delay monetary easing, signaling that inflation remains a concern.
This announcement triggered a sharp market reaction, dealing a blow to both stocks and cryptocurrencies. Bitcoin’s spot price has since dropped by roughly 20%, falling to $82,750 as of March 12, and currently trades around $83,380.
Altcoins tend to be more sensitive to macroeconomic shifts and have suffered even steeper declines. Matrixport notes that “savvy traders” have responded by rotating out of altcoins and into Bitcoin, which, despite its losses, continues to outperform top crypto assets and the broader altcoin market.
Ethereum (ETH) has fallen below $1,900, dropping 17.19% over the past week, while Solana (SOL) is down over 14%, trading at $127. Ripple (XRP) has also taken a hit, currently at $2.27 after an 11% weekly decline.
This trend aligns with a recent Bitcoin dominance analysis by crypto analyst @Chill_trader99, who noted that Bitcoin remains the leading force in the crypto market and that if dominance reaches 70%, it could indicate the start of a bull market.
For Matrixport, the next phase of Bitcoin’s rally hinges on the Federal Reserve’s future policy decisions. If inflation remains stubborn and the Fed opts to raise interest rates instead of cutting them, risk assets like Bitcoin and altcoins could face continued pressure.
However, if liquidity conditions improve and rate cuts are eventually introduced, Bitcoin could regain its bullish momentum.
Recurring Bitcoin ETF Outflows Fail to Dent Dominance
One of the most striking aspects of Bitcoin's dominance in recent months is its resilience despite persistent outflows from the Bitcoin ETF market.
On February 25, US spot Bitcoin ETFs recorded net outflows of $937 million. This massive capital flight pushed weekly losses to nearly $1.5 billion, marking one of the major withdrawals since Bitcoin ETFs were approved.
As March unfolded, the trend continued. According to data from Farside, Bitcoin ETF outflows have surpassed $1.4 billion so far in March 2025, reflecting growing investor uncertainty.
A powerful mix of economic and geopolitical factors fueled the sell-off, such as the Federal Reserve’s recent hawkish stance on interest rates and the U.S. government’s unexpected policy shifts, including a proposed 25% tariff on imports from China, Canada, and Mexico.
Despite these headwinds, Bitcoin's dominance remains largely unaffected by two key factors.
First, many firms and high-net-worth individuals continue to accumulate BTC directly, favoring self-custody or alternative investment vehicles.
Second, the broader crypto market has struggled, with altcoins suffering sharper losses. Traders seeking stability have rotated back into Bitcoin, reinforcing its dominance even as its own price experiences fluctuations.
For now, Bitcoin's dominance remains strong, defying ETF outflows and broader market turbulence.
Jimmy Aki
Drawing from his background in economics, Jimmy has monitored blockchain development for years, firmly believing in its power to democratise finance. Beyond offering commentary on the latest crypto developments, he also spends his time analysing open-source codes of promising projects on GitHub. Jimmy holds Bitcoin and Ethereum.
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