This post is based on some of my current research. I'll occasionally do these on different topics such as fundamental analysis of coins or fundamentals of the market as a whole.

Market Cap Distribution

Bitcoin, being the first cryptocurrency, has dominated the market since its creation, maintaining its status as the highest cap Crypto. However 2017 started to see a shift to this state of affairs, with many alt-coins gaining traction between Q1 and Q2, followed by ICO mania around Q3+4 along with many new competitors coming to the stage.

This chart shows the distribution of the total Crypto market cap, with each layer representing the total share of its coins (e.g Top 2 would currently be the share of Bitcoin and Ethereum combined).

This chart shows the market shares without Bitcoin (so the top 2 would currently be ETH and XRP rather than BTC and ETH, etc).

(All number calculated based on data from Coinmarketcap.com)

2016

As we can see, Bitcoin maintained the vast majority of the market cap throughout 2016 and the market as a whole was extremely consolidated in the top few coins. By the start of 2017, Bitcoin's dominance stood at 88% of total cap. The top 2 (BTC and ETH) stood at 92% and the top 5 at 96%. Throughout the whole of 2016, Bitcoin never dropped below 77% dominance.
Within the alt-coins we can see that the distribution of market cap was slowly broadening in 2016, with the top 2 dropping from 63% at the start of the year to 44% at the end of the year as the top 25 and top 50 grew along with the top 5.

2017

Then, around march of 2017, we started to see a distinct shift in the market, with Ethereum and other alts pushing to significant new highs while Bitcoin continued its steady but relatively slower growth. During this period, a lot of the alt-coin market cap being eaten up by the top 2, as Ethereum was the main mover at the time.
This reached a 2017 peak in June, as Ethereum started its multi-month consolidation period. Bitcoin's share began to push higher again, by taking back ground from 2nd place. Similarly, lower cap alts also began to take back share from the top 2.

2018 and beyond

We can see that Bitcoin clearly does not hold the same weight in the Crypto market as it used to, with its dominance dropping from 92% at the start of 2016 to as low as 33% in 2018 so far.
The market is starting to mature and diversify, with a much wider selection now competing for the top spots compared to even a few months ago. Despite this, the top top 2 coins still hold >50% of total market cap and top 5 hold >70%.
I personally expect Bitcoin's share to continue dropping as yet more promising new technologies arise and coins such as Ethereum continue developing. While Bitcoin does have the first movers advantage, this edge has been eroded over the years and Bitcoin may well become the Myspace of Cryptocurrencies if it cannot get over the political issues surrounding its development.

Disclaimer

I will do my best to give unbiased, objective analysis, but I can make no promises about my accuracy.
All posts are based on my personal opinions and ideas and do not constitute professional financial investment advice.