(Bloomberg) -- Bitcoin’s dominance of the crypto sector is at a three-year high, reflecting robust demand for US exchange-traded funds holding the largest digital asset as well as a rocky period for smaller tokens.

Bitcoin at the end of last week accounted for almost 55% of the $2.4 trillion market for virtual currencies, a level last seen in April 2021, according to CoinMarketCap data. The next largest by that metric are Ether, stablecoin Tether, the Binance exchange’s native token BNB, and Solana.

The batch of three-month-old US spot ETFs from issuers including BlackRock Inc. and Fidelity Investments have amassed about $56 billion in assets to date, ranking as one of the most successful debuts ever for a fund category.

The inflows helped propel Bitcoin to a mid-March record of $73,798. While the token has retreated roughly 6% since then, a gauge of smaller digital assets has sunk more than 30%. The drop coincided with reduced expectations for the kind of looser US monetary policy settings that can fuel speculative gains.

Institutional Demand

Allocations to the US ETFs by institutional investors have “resulted in Bitcoin performing very strongly relative to the rest of the market,” said Benjamin Celermajer, director at digital-asset investment manager Magnet Capital.

Bitcoin and second-ranked Ether jumped on Monday, boosted by indications that asset managers will soon launch Hong Kong-listed ETFs for both tokens. Bitcoin was down around 1% to $63,500 as of 2:35 p.m. in New York, while Ether added about 1% to $3,094. Smaller tokens such as Polygon, Cardano were lower, along with meme-crown favorite Dogecoin.

The Bloomberg Galaxy Crypto Index has more than tripled since the start of last year in a rebound from a deep bear market in 2022.

Crypto speculators are awaiting the so-called Bitcoin halving, which will reduce new supply of the token in half and is expected around April 20. Previous halvings were a tailwind for prices, though there are growing doubts about whether a repeat is likely given Bitcoin recently hit a historical peak.

©2024 Bloomberg L.P.