Bitcoin Dominance Surges Past 60% as Altcoins Struggle

Bitcoin dominance surpassed 60% while ETH, XRP, Solana dropped 9.3%, 13.8%, 19.3%, respectively.

Lucas NogFebruary 3, 2025

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Bitcoin dominance surpassed 60% on February 2 due to a general decline in cryptocurrency markets triggered by US President Donald Trump's tariffs. Altcoins were significantly impacted, with Ether dropping 9.3%, XRP losing 13.8%, and Solana falling 19.3% over the past week. The new tariffs, which include a 25% tax on imports from Canada and Mexico and a 10% tax on goods from China, led to retaliatory tariffs from these countries. Investors, concerned about rising inflation and high interest rates for 2025, shifted away from riskier assets to US government securities. Trader Van Nuener warned that further declines might occur when US futures markets open on February 2, potentially causing additional losses in the crypto sector.

Current Bitcoin dominance at 60.59%. Source: TradingView

In December, BitMEX co-founder Arthur Hayes predicted a sell-off following President Trump's inauguration, suggesting the initial optimism would fade as it became clear that passing crypto-related legislation would take time. Bitget Research analyst Ryan Lee also projected a possible Bitcoin price correction to $95,000 in the short term, citing key macroeconomic factors like labor data and Federal Reserve policy.

Crash in Nasdaq 100 index following the release of DeepSeek R1. Source: TradingView

The market downturn coincides with recent declines in US tech stocks and crypto, triggered by the release of DeepSeek R1, an open-source AI model from China. DeepSeek, which performs similarly to leading OpenAI models but at a lower cost, was seen as a disruptive event, contributing to fears of tighter export restrictions on Nvidia sales to China and increasing uncertainty in financial markets.