Bitcoin dominance, which measures the ratio of the Bitcoin market cap to the entire cryptocurrency market cap, has climbed back above 50%. After a period of relative stability in the crypto markets in the last two months, the dominance of the world’s biggest crypto has surged since the start of this year, having been in the low 40’s at the end of 2022.

The increase is the biggest prolonged expansion in Bitcoin dominance since 2019, when it rose from 53% to 72% in a five-month period starting in April. Notably, this time around, the rise contrasts with the traditional pattern of dominance falling in bull markets as altcoins outpace Bitcoin’s gains.

There are a few theories that could explain this occurrence. Regulation is one factor – Bitcoin has proven to be more resilient than many other coins, while many tokens have been weighed down by the US crackdown on securities laws. Additionally, the sordid activity that has taken place in the crypto industry over the past 18 months may have played a part, as institutions and trad-fi actors struggle to regain trust in the more risky coins.

It is possible that Bitcoin is separating itself from the rest of the crypto market. Bitcoin has always been classified in its own genre, targeting “commodity” status rather than that of a security. Furthermore, Bitcoin’s network has remained online throughout the bear market, and its price has been less volatile than other coins.

Whatever the explanation, it hammers home the notion that we need to take caution when extrapolating past performance into the future. While we can draw insights from the past few years, the sample size of data is too small to make assumptions solely based on history.

The world is still figuring out what cryptocurrency is and what role it will play in the future. Until we have a better understanding, caution should be taken when interpreting trends in the crypto space.