Bitcoin’s dominance is expected to increase in 2025 as its market share rises, while Ethereum (ETH) and altcoins are projected to lag behind in the first quarter of 2025. They have firmly confirmed Bitcoin Volatility as the leading actor in the cryptocurrency scene. While competing cryptocurrencies struggle to draw the same degree of attention. Bitcoin’s continuous strength makes it the asset of choice for both retail and institutional investors. Despite somewhat steady general market conditions.
Bitcoin Dominance Surges Again
Rising quickly in Q1 2025, Bitcoin’s market leadership peaked at 58.8% by early February, its highest level since October 2021. This is a considerable rise from about 51% by the end of December 2024. Bitcoin has attracted capital while trading sideways in the $90,000 to $100,000 range, particularly through recently approved spot Bitcoin ETFS, which have experienced strong inflows from both individual and institutional investors.
Bitcoin’s rise is driven by growing confidence in its ability to store value amid global macroeconomic uncertainty. Since central banks globally imply inflationary pressures, many investors are flocking to Bitcoin as a hedge against currency devaluation. Since late 2024, spot Bitcoin ETFS have performed well in the U.S. market, where this story is popular.
Additionally, technological developments within the Bitcoin network are involved. The Lightning Network and other layer 2 protocols, such as Stacks, are extending Bitcoin’s use cases to include smart contracts and distributed applications, which Ethereum currently dominates. These improvements are changing Bitcoin’s image from a store of wealth to a blockchain ecosystem with practical applications.
Ethereum Losing Steam
Long seen as the most promising altcoin and a leading player in decentralised finance (DeFi), Ethereum has struggled to keep pace. Investor excitement has not materialised to the same degree as observed with Bitcoin, even after spot Ether ETFS have been approved. Over Q1, ETH has stayed below the psychologically significant $4,000 threshold, lacking the kind of momentum many experts had hoped for.
The relative stagnation of Ethereum may be attributed to several factors. One is rivalry—not only from fresh layer-1 blockchains but also from Bitcoin itself, which is starting to encroach on Ethereum’s traditional domain. Furthermore, despite minor changes from network upgrades, Ethereum’s high gas prices and scalability problems remain ongoing concerns.
Spot Ethereum ETFS, which have only garnered $2.4 billion in inflows compared to the tens of billions seen by Bitcoin ETFS, also show below-expected performance. For the time being, at least, this poor response indicates that investors still view Ethereum as a more speculative asset.
Altcoin Market Slumps
The bigger altcoin market has suffered from Bitcoin’s dominance. Since late January, the Crypto Market capitalization has decreased by over 30%, erasing approximately $460 billion. Unlike most cryptocurrencies, Solana (SOL), Cardano (ADA), and Avalanche (AVAX) have mostly traded sideways, attracting investors. They have performed exceptionally well, with 21 years of outstanding performance and a 50% success rate. The return in 3 years to date, three months after initiating its 350% iXRP’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) and its payment commissions, helping to expel rare interest payments in the cryptocurrency.
Many projects struggle to stay visible without a distinct “altcoin season,” a market phase in which capital shifts from Bitcoin into lesser-capacity coins. For such a season to develop, these lesser-capacity coins need to enter a consolidation phase, allowing other coins to flourish. As of yet, that hasn’t occurred.
Final thoughts
Market experts are divided over whether altcoins will recover in the second quarter of the year. One way to revive interest in altcoins is through ongoing development on Ethereum’s scaling roadmap and the growing acceptance of blockchain technology in gaming, finance, and artificial intelligence. Conversely, smaller coins may lag if Bitcoin continues to take the stage and drive capital inflows.
Macroeconomic events will also influence investor mood, particularly with relation to inflation and interest rates. Should central banks remain hawkish.
All told, Q1 2025 has been a tale of altcoin stagnation and Bitcoin consolidation. Ethereum and other tokens certainly have long-term promise, but in the current climate, they are facing difficulties. It remains to be seen whether the second quarter will bring a change in momentum and further cement Bitcoin’s supremacy.
