As The Merge unfolds, the excitement around Ethereum continues unabated. On the contrary, Bitcoin is losing its luster. Its dominance is close to 38%, a level not reached since 2018. We will also see that the two aspects are quite linked. Because what Bitcoin loses, Ethereum gains it back.
Bitcoin dominance at 38%!
As of this writing, Bitcoin’s dominance stands at 38.1%. This means that the Bitcoin marketcap is 38.1% of the total crypto market cap. While this may seem incredibly high for a market with more than 20,000 different crypto projects, it is ultimately a historically low figure for Bitcoin. As shown in the graph below which shows the evolution of Bitcoin Dominance over the last 5 years:
At the beginning of 2018, Bitcoin dominance had fallen below 36%. Before you start to rise again sharply, beyond 70%. At the end of 2020, the weight of Bitcoin compared to the whole market was still more than 70%. Before a sharp fall between March and May 2021. Testing the 39% threshold at the start of the year, the lead has not fallen below this level since 2018.
Bitcoin dominance is a key variable for analyzing Bitcoin against the broader market. Currently, this variable indicates that we are in a period of dominance of altcoins compared to BTC. The total Bitcoin market is currently $378 billion.
Ethereum in full view!
Conversely, Ethereum keeps light. It goes without saying that The Merge, the most anticipated crypto event of the year is fast approaching. On Coinmarketcap’s Ethereum page, a countdown even before the user shows how much is waiting for the market in just over 8 days. As a reminder, the Merger needs to see the Ethereum blockchain transition from a Proof of Work protocol to a “Proof of Stake” type validation protocol.
Concretely, this change will cause a significant reduction in the carbon impact of the blockchain that Vitalik Buterin appreciates. With a reduction of more than 99.9% of Ethereum’s environmental impact. As The Merge approaches, the trend may even increase. In any case, this is the opinion of some observers such as analyst Ali Martinez.
Bitcoin dominance fell below 39% for the first time in four years. Ethereum seems to be taking center stage with the upcoming Merge upgrade, while Cardano is gaining some traction with its Vasil blockchain.
For its part, Ethereum’s dominance is historically high. It now exceeds 20%. As shown in the graph showing this variable over the last 12 months:
If we think in terms of marketcap, Ethereum today weighs more than half of Bitcoin. Because if the valuation of Bitcoin is 389 billion, Ethereum weighs more than 200 (203) billion dollars.