Crypto's total market cap hit an all-time high above $660 billion on Tuesday as so-called alternative coins, or "alt-coins," charged upwards.

Meanwhile the largest crypto, bitcoin, lagged behind small rival coins.

Bitcoin's share of the total cryptocurrency market cap hit an all-time low on Tuesday below 36%.

With a market share of nearly 90%, bitcoin's dominance over the cryptocurrency space appeared unshakable at the start of 2017.

As the year progressed, and new coins came onto the market, bitcoin's position dwindled. That trend has continued into 2018.

Bitcoin's market capitalization as a percentage of the total crypto-market hit an all-time low below 36% on Tuesday as smaller so-called alternative cryptocurrencies rallied, according to data provider CoinMarketCap.com. That's down from 65% at the start of December.

To be sure, bitcoin gained an eye-popping 1,300% in 2017. Still, over the past month many alternative digital currencies have far outpaced bitcoin, thus cutting into bitcoin's share of the overall market.

Ripple, Stellar, and Cardano were all up more than 80% over the last week, for instance. Meanwhile, bitcoin was trading down more than 6% over the same period. What's striking is that typically when bitcoin is down, the entire market takes a hit. But even as bitcoin lagged, crypto's total market cap soared above $665 billion as alts charged upwards.

John Spallanzani, the chief macro strategist at GFI Group, told Business Insider that a healthy shift from bitcoin to other cryptocurrencies has been taking place in the space.

"Rotation is good," he said in a Twitter direct message."It's healthy when money moves around, goes to where it is treated best."

Ryan Taylor, the CEO of cryptocurrency Dash, told Business Insider that bitcoin's market share will continue to decline as more cryptocurrency projects enter the market.

"It is inevitable," he said. "One blockchain cannot be all things or address all market needs optimally."

Ripple's XRP, for instance, is designed to improve international money transfers. As for Dash, it seeks to act as a convenient vehicle of exchange in ecommerce. Those use-cases, according to Taylor, have been attracting investors to alts.

"While bitcoin is increasingly viewed as digital gold, other blockchains are focused on delivering smart contracts, tracking logistics data, serving specific industries, or facilitating transactions," Taylor said.

David Sønstebø, the founder of cryptocurrency IOTA, said bitcoin's identity crisis has allowed new projects to eat its lunch. Power brokers in the bitcoin community have squabbled over its purpose for years. Some have said it is better suited to behave as a store of value - sort of like a digital gold - whereas others see it better suited as a payments network. Investors, Sønstebø said, will pour into those cryptocurrencies with a clear use-case.

"I believe 2018 will be the year where crypto has to prove its utility beyond a speculative asset, and bitcoin cannot do that today," Sønstebø said. "I don't even like calling projects 'alts' anymore, rather bitcoin was a prototype and now we are seeing the future incarnations being built."

Still, not everyone thinks market capitalization is a meaningful indicator. Jimmy Song, a bitcoin developer, said the data is unreliable and doesn't paint a precise picture of what's going on in the cryptocurrency market.

"Like with most things, Bitcoin Dominance is a very crude metric and one that’s unfortunately very easy to manipulate," he said in a Medium post.

Some coins, such as Ripple, are pre-mined. As such, the entities behind the coins can increase or decrease the supply as they see fit.

"This isn’t anything new and in the stock market, stocks that play float manipulation games generally become juicy targets for short-sellers," he wrote. "Alt-coins like Gnosis, for example only floated 5% of their coins, so ask yourself, how much of Gnosis’s $115 million market cap as of this writing is real?"