The developments come after the US Securities and Exchange Commission (SEC) delayed a decision on a proposed bitcoin exchange-traded fund (ETF). The news triggered a market reaction, ultimately sending the total value of all cryptocurrencies down to $227.8 billion on Wednesday – the lowest level since November 2017 – according to data from CoinMarketCap.
The drop to nine-month lows marks a 10.7 percent depreciation on a 24-hour basis. As of press time, the market capitalization had risen back slightly to $228.6 billion.
Although the ETF decision is solely in regards to bitcoin, many alternative cryptocurrencies are printing worse losses than the world’s largest cryptocurrency by market cap, signaling worsening risk sentiment in the market.
The rise in the bitcoin dominance rate – an indicator that tracks the percent of the total crypto market capitalization contributed by the leading cryptocurrency – to an eight-month high of 48.6 percent also suggests the investors are venturing out of alternative cryptocurrencies and into bitcoin, and then possibly on to fiat currency.
The falling spread or difference between the total market capitalization of all cryptocurrencies except bitcoin and BTC’s market capitalization is also signaling reduced demand for high-risk alternative cryptocurrencies.
At press time, the total market capitalization of all cryptocurrencies excluding bitcoin is just over $118 billion – an 8.5 month low – whereas the total market cap of bitcoin is topping $111 billion, a figure last seen less than a month ago and above its annual low of $99,915,112,929, according to CoinMarketCap.
Meanwhile, the BTC dominance rate is hovering around 48.9 percent and could rise to 50 percent if the risk aversion worsens, boosting demand for well-established cryptocurrencies like BTC.
Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.
Image via Shutterstock