The market dominance of Bitcoin (BTC) fell significantly Thursday, reaching a four-year low at 39.06% with a market capitalization of $387.85 billion.

Apart from Bitcoin, Ether's (ETH) market dominance has also been on a decline. It was at 17.3% with a market cap of $166.6 billion Thursday, Finbold reported.

Market dominance is the ratio of the market capitalization of a particular cryptocurrency to that of the entire crypto market and it tells how strong the demand and usage of a token is.

However, the market dominance of Bitcoin (BTC) saw a slight increase Thursday evening. It rose to 40.01%, while the market cap declined to $382.73 billion as of 8.31 p.m. ET. Ether's dominance rose slightly to 17.38% as its market cap remained at $166.6 billion.

The declining dominance of the world's leading cryptocurrency raises doubts about Bitcoin's ability to act as a store of value and a hedge against inflation.

A store of value is a commodity that never changes its worth with time and with inflation on the rise. With Bitcoin crashing significantly from its all-time high, it seems the heavily touted property of the digital asset is still not perfect.

The declining market dominance of Bitcoin and Ether, despite the transition of the latter from proof-of-work to proof-of-stake, suggests there is an increased interest from investors in various altcoins. It is because these tokens tend to be more volatile and show higher gains than the top few tokens in bearish markets.

Interestingly, Bitcoin tried to hold the $20,000 price level Thursday but dropped to $19,906 at the time of this writing.

Despite the price crashes and decrease in market dominance, a senior commodity strategist at Bloomberg Intelligence has predicted that Bitcoin and Ether will outperform all the assets when the market turns bullish.

Bitcoin representation is seen in an illustration picture taken at La Maison du Bitcoin in Paris
Reuters
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