In a week full of twists, the cryptocurrency market experienced a surge in altcoin dominance following the SEC’s response to the Ripple ruling. The regulatory uncertainty surrounding Ripple had an unintended effect on altcoins, with Bitcoin’s volume dominance plummeting 8% since the beginning of July.
According to the latest report from Kaiko research, this shift has put altcoins at their highest level of market control in the last four months, with BTC’s dominance across the top 25 centralized exchanges dropping to 27%, the lowest since April.
Offshore exchanges felt the impact even more profoundly, as South Korean altcoin volume spiked, causing BTC dominance to fall by a significant 20% since the start of 2023. Meanwhile, on U.S. exchanges, altcoins showed resilience, indicating that regulatory actions have yet to dampen demand for alternative digital assets thoroughly.
Altcoin liquidity, measured by 1% market depth, also increased slightly since July’s beginning, indicating a growing interest in the altcoin space. Kaiko’s market depth data revealed that the top 10 altcoins by market cap saw an increase of approximately $20 million in liquidity. This liquidity boost coincided with the ongoing altcoin rally, suggesting that traders and investors are finding opportunities in the altcoin market.
The week also saw two new tokens gain attention. Aave’s GHO, a decentralized stablecoin pegged to the USD and overcollateralized, rapidly reached a $2.5 million market cap within two days of launch. However, it faced challenges with liquidity and traded at a discount to established stablecoins like USDT and USDC.
Stablecoin market activity experienced mixed fortunes. Tether’s USDT market cap reached an all-time high, while the total market capitalization for stablecoins declined for the fifth consecutive quarter, primarily driven by drops in BUSD and USDC.
Concentration Of Crypto Trading Activity Shifts To Binance
Additionally, the concentration of crypto trading activity shifted towards Binance, with the exchange losing dominance on both spot and derivative markets, sparking bearish bets on its BNB token amid rumors of mass layoffs.
The correlation between Bitcoin and the U.S. Dollar weakened significantly in 2023, falling from -60% to -10%. This shift in correlation coincided with a decline in the share of USD-denominated BTC trade volumes. On a positive note, Bitcoin showed resilience to rising real yields, gaining 20% since June despite a rebound in U.S. real yields.
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