(Bloomberg) — Bitcoin is regaining its dominance of the cryptocurrency universe.
It now accounts for 44% of total crypto market value, the most since October, just before the latest bull market peaked, based on data from CoinGecko. Bitcoin’s renewed hegemony is a reflection of how the collapse of the TerraUSD stablecoin earlier this month has ravaged smaller tokens like Avalanche and Solana.
The largest cryptocurrecy was down about 1.5% on Friday, making it a relative safe haven compared with altcoins like Avalanche, which tumbled as much as 11%. Bitcoin has also been outperforming second-largest token Ether, which has been rocked by concerns about a glitch in the effort to make its underlying blockchain less energy intensive.
“Typically, when there’s a correction in crypto markets, altcoins underperform Bitcoin, as they are perceived as higher risk coins than Bitcoin,” said Julio Moreno, a senior analyst at CryptoQuant.
Read more: Ether, Altcoins Lead Crypto Rout as Terra DeFi Fallout Deepens
Even with its recent outperformance, Bitcoin still faces a host of challenges, including monetary tightening by central banks around the world. And while Friday’s decline was small compared to other digital coins, it came against the backdrop of global equities advancing. In the past few months, Bitcoin has tended to move in tandem with stocks.
In addition, large Bitcoin holders — known in industry parlance as whales — are moving their tokens to exchanges, suggesting they may be getting ready to sell, according to Moreno. The share of exchange inflows from whales to total inflows is at the highest since August 2019, he said.
“In the past, when whales were moving their coins to exchanges at this pace a price correction happened, and in the current macro context this cannot be ruled out,” he said.
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