Bitcoin is losing market share to the second-biggest cryptocurrency.
For years, ether couldn’t even dream of taking on Bitcoin, its big brother. Now, it may be getting closer to what it wants to do.
The second-largest cryptocurrency is taking market share away from Bitcoin ahead of an important software upgrade called “Merge.” If the developers can pull it off in the next few days, “Merge” could make the Ethereum blockchain use much less energy.
According to the data platform CoinMarketCap, Bitcoin’s share of the market value of all cryptocurrencies has dropped to 39.1% from a high of 47.5% in mid-June. On the other hand, ether has gone from 16% to 20.5%.
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The newcomer is still a long way from taking over Bitcoin as the most popular cryptocurrency, a change that fans call “the flippening.” It has made up some ground, though. In January 2021, Bitcoin was the most popular currency with 72% of the market, while Ether had only 10%.
As for price, one ether is now worth 0.082 bitcoin, which is close to the high in December 2021 and a lot more than the low in June 2022, which was 0.049.
“People now see Ethereum as a pretty safe asset because they’ve seen how successful the network is. “They think it’s not going anywhere,” said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.
“How Ethereum is seen in the crypto ecosystem is not going to change.”
CAPRICIOUS BITCOIN
After several delays, the merge is expected to happen on Thursday. This could lead to more people using the blockchain, which could boost the price of ether, but nothing is certain in the volatile cryptocurrency market.
Ethereum is the backbone of much of the “Web3” vision of an internet where crypto takes centre stage. It powers applications that use crypto offshoots like decentralised finance and non-fungible tokens, but this much-hyped dream is still not a reality.
Both Bitcoin and Ether have almost lost half of their value this year because people are worried about huge interest rate hikes from central banks. Still, investors seem to like how the merge looks. Since the end of June, the price of ether has gone up by more than 65%. Bitcoin hasn’t changed much in the same time frame.
Doug Schwenk, CEO of Digital Asset Research, said, “We’re going to see that some investors who are worried about energy use will be interested in ether.” However, he warned that ether was still a long way behind Bitcoin.
THE KING IS STRONG
In previous bear markets, investors sold lesser tokens (called “altcoins”) in favour of the more liquid and reliable Bitcoin. But in the current bear market, Bitcoin is becoming less popular.
Taking down the king isn’t easy, though.
Bitcoin is still the most well-known cryptocurrency by a large margin. Since 2020, most mainstream investors who have tried out the crypto market have started with Bitcoin, which is the most liquid and most widely traded token.
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Its $427 billion market cap is still more than double that of Ether’s $210 billion, and people in the market are sure that the original digital coin is still the gold standard in crypto because it is limited in supply.
Some people in the market say Bitcoin still has a strong hold on the crypto crown, even if it has to share it with other coins. Hugo Xavier, CEO of K2 Trading Partners, said that if the crypto market turns bullish, its dominance could rise to between 50% and 60%, but it is unlikely to reach 70% again.
