FILE - Bitcoin dominates the crypto market: why the #1 cryptocurrency outperforms altcoins

Bitcoin is often called the king of cryptocurrencies 👑, and with good reason: it continues to dominate the crypto market in terms of value and performance. In 2025, Bitcoin reached new all-time highs, while many altcoins (alternative cryptocurrencies) struggled to keep up. Despite periodic enthusiasm for certain promising cryptos, Bitcoin maintains a comfortable lead over the competition. Why does Bitcoin outperform the rest of the crypto market and altcoins? Let’s explore the key factors that explain the supremacy of the first cryptocurrency.

Bitcoin vs altcoins: understanding the difference and dominance

In the crypto universe, Bitcoin is the very first decentralized digital currency, whereas “altcoins” refers to all other cryptocurrencies that appeared after it. Over the years, thousands of altcoins have been created – projects with varying goals – but none has dethroned Bitcoin as the market leader. Bitcoin’s dominance (its share of the total cryptocurrency market capitalization) remains high, often around 50% or more, meaning Bitcoin alone is worth as much as all other cryptos combined. For example, in 2025, its dominance exceeded 60%, a level not seen in years. This clearly indicates that Bitcoin attracts the bulk of investments and attention, pushing many altcoins into the background.

This dominant position of Bitcoin is also evident in performance. When Bitcoin’s price climbs, it often pulls the market up with it, but during periods of stagnation or decline, it generally holds up better than altcoins. Altcoins, by their more speculative nature, tend to be more volatile: they can experience meteoric rises during “altseason” (periods when altcoins rally), but they also suffer much sharper corrections when trouble hits. In contrast, Bitcoin has proven to be a relatively more stable value within the crypto ecosystem, which helps reinforce its status as number one.

Historical overview: Bitcoin’s supremacy across cycles

To understand why Bitcoin still outperforms altcoins today, it helps to look at the history of crypto cycles. Created in 2009, Bitcoin initially reigned unchallenged – its dominance was close to 100% when no other significant digital currency existed. Then, from around 2011-2013, the first notable altcoins appeared (Litecoin, Ripple, Namecoin, etc.), starting to chip away at this dominance. But in each major bull and bear cycle, Bitcoin has shown its ability to bounce back and maintain its role as the market’s locomotive.

Take the example of the 2017 bubble: that year, Bitcoin reached nearly $20,000, while a multitude of altcoins rode the ICO frenzy (cryptocurrency fundraising booms) on Ethereum. During this period, many investors believed certain altcoins might outperform Bitcoin in returns. And indeed, occasionally some altcoins skyrocketed in value far more than BTC. However, when the market turned in early 2018, the vast majority of those altcoins saw their prices collapse by 90% or more, with many nearly disappearing entirely. Bitcoin itself suffered a major crash, but it managed to survive the crypto winter and came back stronger in the next cycle.

Similarly, during the 2020-2021 bull run, Bitcoin once again led the way, hitting a record high around $69,000 at the end of 2021. A new wave of altcoins emerged (DeFi projects, NFT tokens, memecoins) with spectacular gains, giving the impression of a permanent “altseason.” Nevertheless, when the market cooled in 2022, many of these alternative projects lost most of their value, victims of the end of excessive speculation or of structural weaknesses. Bitcoin, once again, weathered the storm: despite a sharp decline, it didn’t falter to the point of disappearing, and by 2023-2024 its price had recovered and pulled the market into a new uptrend.

The lesson from these past cycles is clear: Bitcoin benefits from a “phoenix” effect that few altcoins possess. It rises from its ashes after each crash and eventually reaches new heights, whereas many altcoins from previous eras never return to their former glory. This cyclic history strengthens investor confidence in Bitcoin over the long term, and explains why Bitcoin remains the benchmark in the cryptocurrency market.

Bitcoin: an asset of trust and security 🛡️

A major factor that allows Bitcoin to outperform altcoins is the confidence it inspires. Bitcoin is by far the most battle-tested and secure network in the entire crypto ecosystem. Since its launch, it has never been directly compromised: the Bitcoin blockchain technology, supported by an immense network of miners, ensures unmatched security. This robustness is reassuring for investors. In contrast, many altcoins – especially those that introduce rapid innovations – have experienced bugs, hacks, or network outages. Faced with these risks, cautious users often prefer to keep the bulk of their capital in Bitcoin, seen as a reliable refuge.

Beyond the technical aspect, Bitcoin enjoys an unparalleled level of notoriety and brand recognition. It is the cryptocurrency best known to the general public; its name is almost synonymous with crypto in the minds of many. This global recognition gives Bitcoin an important advantage: it benefits from a much higher degree of institutional and popular trust than altcoins. For example, when a company or a traditional fund considers buying cryptocurrencies, it usually turns to Bitcoin first, deeming this asset more solid and legitimate.

Bitcoin is often nicknamed “digital gold.” This nickname reflects how many investors perceive it: like gold, Bitcoin is a rare asset outside the traditional monetary system, which can serve as a safe haven in times of uncertainty. During market turbulence, we frequently see capital moving out of altcoins and into Bitcoin (or into stable assets), as market participants seek to protect themselves by holding the safest asset in the crypto sector. This “flight to quality” dynamic consistently benefits Bitcoin, which withstands crises better and emerges stronger relative to more fragile cryptos.

Institutional adoption favors Bitcoin 💼

A decisive factor in Bitcoin’s recent outperformance against altcoins is the influx of institutional capital and the growing adoption of Bitcoin by major financial players. Over the past few years, we’ve seen publicly traded companies add Bitcoin to their treasury (like MicroStrategy or Tesla), traditional banks and investment funds offer Bitcoin-related products, and even countries (such as El Salvador) adopt Bitcoin as legal tender. These developments have given Bitcoin the status of a credible and respectable asset in the eyes of the global financial world – a status that few altcoins can claim.

In 2023-2025, a major turning point was the interest from fund managers in ETFs (index funds) based on Bitcoin. Finance giants like BlackRock filed applications to launch Bitcoin ETFs, paving the way for broader institutional investor participation in this market. The anticipation (and in some jurisdictions, the actual launch) of these ETFs led to significant flows of fresh money into Bitcoin, driving up its value and market share. For example, news surrounding these ETFs coincided with BTC hitting new record prices, reinforcing the idea that “Wall Street” favors Bitcoin above all.

Moreover, large financial institutions are beginning to officially recognize Bitcoin’s performance. A bank like Bank of America even designated Bitcoin as the best-performing currency of 2025, with over +50% gains, far surpassing traditional currencies and many classic assets. This kind of recognition by established entities brings increased legitimacy to Bitcoin and encourages other investors to take interest. Meanwhile, altcoins are not drawing nearly as much attention from these big investors: aside from a few projects like Ethereum that stand out, most alternative cryptos are seen as speculative bets too risky for institutional capital. As a result, the professional money flows primarily into Bitcoin, which boosts its performance compared to altcoins.

Digital scarcity: Bitcoin is limited, altcoins are not

Among the fundamental reasons for Bitcoin’s supremacy is its programmed scarcity. The Bitcoin protocol is designed so that there will never be more than 21 million BTC in circulation. This fixed limit – combined with the regular decrease in new bitcoins creation (through “halvings” that cut miners’ rewards in half approximately every four years) – creates a dynamic of increasing scarcity. In other words, Bitcoin is a deflationary asset by nature: as demand rises, supply cannot exceed this cap, which puts upward pressure on price in the long term. (The latest halving in 2024 thus brought Bitcoin’s annual inflation below 1%, further accentuating the asset’s scarcity.)

By contrast, most altcoins don’t offer the same scarcity. Many have either an unlimited supply or a constantly inflating supply (sometimes necessary to run their network, as is the case for some smart contract platforms). Moreover, new cryptocurrencies are created all the time: anyone can launch a token, which means the total number of altcoins on the market is continuously expanding. This oversupply dilutes attention and investment. It’s difficult for any single altcoin to stand out sustainably when thousands of others often very similar to it exist.

Thus, Bitcoin benefits from its unique position as a “rare asset” in the crypto universe. It’s often compared to gold for this reason: its limited quantity gives it a special appeal as a store of value. Altcoins, on the other hand, are more akin to a multitude of tech startup stocks – some may grow enormously, but many others will fail or see their market share eaten away by newcomers. Bitcoin’s scarcity, combined with the network effect it has gained, means that demand is more concentrated on Bitcoin as a trusted investment, especially at a time when global inflation is a concern for savers.

Market and liquidity: Bitcoin attracts capital first

The behavior of the crypto market often follows a cyclical pattern tied to the rotation of capital between Bitcoin and altcoins. In a recovery phase or the start of a bull market, investors tend to position themselves on Bitcoin first, as it’s considered less risky among crypto assets. This phenomenon can be explained by Bitcoin’s superior liquidity: with the highest market capitalization and the largest trading volumes, Bitcoin allows large amounts to be invested without too much price impact, which reassures big funds. Once Bitcoin rises significantly and reaches new levels, some of the gains can then “spread” into altcoins, possibly triggering an altseason. But as long as Bitcoin hasn’t finished its run, many altcoins remain lagging.

Conversely, in a bear market phase or times of uncertainty, capital tends to leave altcoins first. Investors retreat to assets deemed safer, which in the crypto world means Bitcoin (or sometimes dollar-pegged stablecoins). This shift causes a relative outperformance by Bitcoin: if it declines, altcoins usually fall even harder, and if it stagnates, many altcoins continue to decline. We saw this during the crises of 2022, when the bursting of DeFi bubbles and the collapse of certain platforms led to a rout in altcoins, whereas Bitcoin, despite the correction, maintained a growing market share in proportion.

Another market factor is correlation with other financial assets. In recent years, Bitcoin has shown some correlation with stock markets, appreciating notably when indices like the Nasdaq were rising and risk appetite was returning. In these periods of economic confidence, Bitcoin often serves as the entry point for investors into the crypto world: they prefer to buy BTC (seen as a “crypto blue-chip”) rather than scatter into lesser-known altcoins. And when conditions are less favorable, those who still want exposure to crypto tend to hold onto Bitcoin more than other coins, out of caution. Thus, whatever the climate, Bitcoin captures a disproportionate share of market liquidity compared to altcoins, which allows it to fare better.

Regulation: Bitcoin is better off than altcoins 🏛️

The regulatory question has become crucial to understanding the different trajectories of Bitcoin versus most altcoins. Bitcoin, due to its decentralized nature and history, is often regarded by authorities as a category of its own, akin to a digital commodity (some call it a “digital commodity”). In the United States, the SEC (the securities regulator) has made it clear that it does not consider Bitcoin a security, which puts it outside the scope of many restrictive regulations. Many other countries have taken a similar approach, treating Bitcoin more as a virtual currency or a sui generis digital asset, rather than equating it with a stock.

In contrast, many altcoins reside in a legal gray area. Several alternative cryptocurrencies have faced lawsuits or warnings from regulators who deem they resemble unregistered securities. For example, some very popular tokens have been targeted for violating securities laws (one can cite the case of Ripple/XRP, which went through a long lawsuit with the SEC, among other projects facing similar scrutiny). This legal uncertainty weighs heavily on those altcoin prices: exchanges may delist them, institutional investors avoid them as a precaution, and the public is wary of projects whose legal status is unclear.

Bitcoin, on the other hand, stands apart from these concerns. Its initial distribution with no ICO, its lack of a central leader (anonymous creator and decentralized community), and its long existence without major regulatory hiccups mean it is much less likely to be hindered by the law. It even benefits from a more favorable political current, with some officials seeing it as an interesting innovation or a strategic asset. Consequently, the relative regulatory clarity that Bitcoin enjoys once again draws more investment toward it. If crypto regulations tighten, it is widely acknowledged that Bitcoin would be the asset best positioned to survive, whereas many altcoins might get caught in the crossfire.

Competition and innovation: altcoins are victims of their sheer number

The landscape of altcoins is extremely fragmented. To date, there are thousands of different cryptocurrencies, with new ones being created each week. This abundance has a major downside: it results in fierce competition among altcoins and a dilution of value. Each altcoin tries to grab attention with its promise (be it technological, utility-based, or purely speculative), but few manage to build solid long-term value. Consequently, if we look at the “altcoin market” as a whole outside of the few leaders, we see a chronic underperformance compared to Bitcoin.

Only a few leading altcoins, like Ethereum, manage to stay consistently near the top in market cap and achieve significant adoption. Many other altcoins have more fleeting fates: they might have their moment of glory during a hype phase (for example: a new DeFi trend, a viral meme coin, etc.), then fall into obscurity or indifference once the fad passes. For investors, this means it’s difficult to bet on the right horse among hundreds of projects – the risk of picking an altcoin that won’t live up to its promises is high. Conversely, betting on Bitcoin appears to be a safer option, because we know it will very likely still be around in ten years, whereas many of today’s altcoins might no longer exist.

By way of illustration, if we compare the ranking of the top ten cryptocurrencies from five years ago to today’s, we find that Bitcoin (and to some extent Ethereum) stands out as the only constant survivor: many former “stars” (such as Monero, IOTA, or NEO) have dropped out of the top 10, replaced by newcomers. This incessant rotation weakens confidence in altcoins over the long run. Granted, occasionally an altcoin will skyrocket and surpass Bitcoin’s performance for a short period (typically thanks to exciting news or sudden speculation – for example, the Bitcoin Cash (BCH) token jumped +25% in one month in 2025 due to rumors of a capital split). But these sensational spikes are isolated and often short-lived, whereas Bitcoin keeps on its trajectory over time.

Ultimately, all these internal dynamics of the altcoin space – rapid rotation, competing ecosystems, passing fads – cause the overall flow of value to eventually return to the safe haven of Bitcoin.

Will altcoins make a comeback? 🧐

Given Bitcoin’s current dominance, a fair question arises: is a new “altseason” still possible in the future? The history of crypto cycles suggests that yes, sooner or later, certain periods favor altcoins more. Often, after a strong rise of Bitcoin, it reaches a plateau and its volatility decreases, which can encourage investors to seek higher returns on smaller assets – thereby creating a rotation into altcoins. For example, in the past, when Bitcoin’s dominance dipped below certain thresholds, we saw the altcoin market temporarily explode with incredible multiples on some tokens.

However, current conditions differ from previous cycles. As we’ve highlighted, the multitude of altcoins and a certain market saturation make a broad-based takeoff of all altcoins less likely. We might instead see targeted mini-“altseasons”: by sector (for example, a strong trend around gaming-related cryptos, or a new innovative DeFi protocol), or centered on truly solid projects that each find their own success. We can also imagine that major technological advances or improvements on existing blockchains (for example Ethereum evolving, or other projects delivering real value) could reinvigorate altcoins as a whole – but that would require a very bullish market context, with abundant liquidity ready to fuel speculation.

In 2025, the “Altcoin Season Index” remains low, indicating that we are in the midst of a “Bitcoin season.” As long as this index doesn’t increase significantly, it means fewer than 25% of the top altcoins are outperforming Bitcoin, which is indicative of a BTC-dominated market. For a classic altseason to return, there would need to be such confidence in the crypto market that investors feel ready to leave the flagship for smaller boats – which isn’t the case at the moment. Nevertheless, cycles by nature change, and the creativity of the crypto ecosystem could eventually rekindle interest in certain altcoins. But even in that scenario, Bitcoin would likely keep its throne: the magnitude of its lead and the foundations it has laid make a total reversal of the hierarchy unlikely.

Conclusion: will Bitcoin remain the king of crypto?

In light of all these elements, it’s clear that Bitcoin outperforms the crypto market and altcoins thanks to a combination of unique factors. Its longevity and impeccable track record confer it unmatched trust. Its adoption by institutions and its entry into the traditional financial landscape provide it with resources that other cryptos lack. Its scarcity and its status as “digital gold” make it particularly attractive in a world seeking safe havens. Additionally, market dynamics and regulation work in its favor, reinforcing its status as the number one choice when investors think about cryptocurrencies.

Of course, this doesn’t mean altcoins have no role to play. Innovation continues in this bustling arena, and some alternative cryptocurrencies offer features or use-cases that Bitcoin doesn’t have. It’s entirely possible that certain altcoins will outperform Bitcoin for short periods in the future – the history of crypto bubbles has shown that. Nonetheless, in the long run, the trend has so far been a strengthening of Bitcoin’s dominance in terms of value and recognition. Each cycle seems to widen the gap in favor of Bitcoin as the safe value in the ecosystem.

Ultimately, whether you’re a seasoned investor or a curious newcomer, understanding why Bitcoin outperforms altcoins helps to better grasp the dynamics of the cryptocurrency market. Bitcoin has managed to establish itself as the absolute reference point, the “giant” around which the entire sector revolves. And as long as this prevailing trust and interest endure, Bitcoin will likely continue to outperform the rest of the crypto market and reign supreme over the cryptosphere.