Would you rather own a dominant player in a stale sector or a healthy leader in an even faster-growing market sector?
Bitcoin (BTC -1.11%) used to be the only cryptocurrency that mattered. Having launched in 2009, Bitcoin had no rivals or competitors at all for a couple of years. Altcoins started popping up in 2011, followed by a rash of cryptocurrency launches in 2013, but Bitcoin was still firmly the king of the hill. In the spring of 2013, Bitcoin accounted for more than 90% of the total market value in the crypto sector.
A shrinking market slice...
That ratio has dropped over the years as thousands of altcoins started taking market share away from the oldest and most prominent name in crypto. Today, Bitcoin's dominance has receded to roughly 42%:
So yes, you could argue that Bitcoin's influence on the crypto market is shrinking over time. That's only natural as the sector matures, people from all walks of life around the world become more comfortable with the idea of a digital currency, and the underlying technology continues to evolve.
Bitcoin was never designed to manage smart contracts, non-fungible tokens, or massive volumes of financial transactions. Instead, it was meant to act as a long-lived store of value, more comparable to virtual gold bars than digital dollar bills.
...in an explosive growth sector
And from that perspective, Bitcoin is doing just fine. The cryptocurrency's market value has soared from $1.0 billion nine years ago to $896 billion today:
So Bitcoin has turned 90% of a billion-dollar market into a 42% share of a much more mature market, carrying a value of $2.1 trillion today. I don't see that development as a disappointment. It's just a typical, predictable, and healthy process.
These are still early days for the grandfather of all cryptocurrencies -- and for the sector as a whole. Cathie Wood's Ark Invest team expects Bitcoin to be worth nearly $29 trillion by the end of this decade. That target assumes a final price of $1 million per Bitcoin token, up from $47,400 today.
And Bitcoin's share of the total crypto market is, of course, expected to continue shrinking for years to come. That's not a problem, as long as the digital currency keeps on growing while the crypto sector thrives as a whole.