Bitcoin Dominates Market Rally as Altcoins Struggle to Keep Pace
Bitcoin surged roughly 24% in the past week to near $79,000, its best run since 2023, while the broader altcoin market failed to keep pace, pushing Bitcoin's market share to around 61%.
Bitcoin’s Outsize Rally
Bitcoin has delivered its strongest weekly performance since 2023, climbing approximately 24% over the past seven days to near $79,000. While this surge marks a significant milestone for the cryptocurrency, it has also revealed a stark divergence between Bitcoin and the rest of the digital asset market. Ethereum, which typically leads the altcoin charge during rallies, posted a respectable 30% gain to trade above $2,500. However, smaller cryptocurrencies have lagged substantially, suggesting that capital inflows have been concentrated in Bitcoin rather than distributed across the broader ecosystem.
Market Dominance Shifts in Bitcoin’s Favor
The concentration of gains in Bitcoin is evident across key market metrics. Total3, an index that measures the broader altcoin market while excluding both Bitcoin and Ethereum, has actually declined during the same week that Bitcoin rallied toward $80,000. Similarly, Total2, which tracks the complete altcoin market, initially surged above $1 trillion before retreating. It currently trades near $1.05 trillion and has fallen over the past two days even as Bitcoin continued climbing.
Bitcoin’s dominance—its share of the total cryptocurrency market capitalization—has risen to approximately 61% this week, the highest level in recent months. The CoinMarketCap Altcoin Season Index, which measures how many of the top 100 cryptocurrencies have beaten Bitcoin’s performance over a 90-day period, currently sits at 46. This reading remains well below the 75 threshold required to signal a genuine altcoin season, indicating that Bitcoin holders remain positioned ahead of altcoin traders.
Treasury Policy and Political Support Ignite the Move
According to the U.S. Treasury, the catalyst for Bitcoin’s surge originated from a monetary policy decision. The Treasury announced it would increase long-bond buyback operations from $2 billion to $4 billion per transaction, effective September 9. These purchases of government debt are designed to support demand and lower borrowing costs. The announcement triggered dollar weakness and prompted investors to rotate capital into inflation hedges, particularly Bitcoin, mirroring the trade that has propelled gold to historic highs.
Political developments have amplified the momentum. President Donald Trump met with cryptocurrency executives at the White House and subsequently lobbied Congress to advance the Clarity Act, legislation intended to establish which federal regulators have jurisdiction over specific cryptocurrency asset classes. This push for regulatory clarity has reinforced positive sentiment in crypto markets and may be signaling a more favorable environment for digital assets at the federal level.
The concentration of this rally in Bitcoin rather than the broader altcoin market underscores how macroeconomic shifts and policy changes can benefit leading cryptocurrencies while leaving smaller projects behind—a dynamic that could reshape portfolio allocations across the sector.
Source: U.S. Treasury, via Decrypt. Not financial advice.