Bitcoin's market share in the cryptocurrency market continues to grow, reaching a record 61.2%. Investors are shifting towards more stable assets amid economic uncertainty.
Bitcoin's Market Share Rises
According to Matrixport's report, Bitcoin's dominance rapidly increased from 54% last December following a brief rally in altcoins. Experts emphasize that the Federal Reserve's unexpected statements and inflation uncertainty have redirected investors towards Bitcoin.
Altcoin Rally Disappoints Investors
The altcoin rally that began last November was disrupted by strong U.S. employment data and the Fed's decision to keep rates stable. Matrixport reports that investors are moving away from high-risk assets like altcoins to more stable cryptocurrencies such as Bitcoin. Key altcoins like Ethereum and Solana have lost an average of 30% of their value over the past three months.
Fed Policy, Bitcoin, and Altcoins
The Fed's decision on January 29 to maintain interest rates caused a sharp decline in the cryptocurrency market. Following this decision, Bitcoin lost 20% of its value, while altcoins suffered greater losses. However, February's inflation data, which fell short of expectations, reduced the likelihood of changes at the Fed's March meeting by 85%, facilitating a market recovery.
Experts expect investors to continue monitoring the Fed's policies in coming months, with Bitcoin anticipated to remain a 'safe haven.' A cautious approach towards altcoins is recommended until clearer Fed signals emerge.
