Bullish Signal? Ethereum Market Dominance Sitting Above 20%
In the last five years, Ethereum has not only taken a significant market share from bitcoin, but it has consistently grown in the same time period. While bitcoin had maintained the majority of the market dominance for the longest time, it has not taken altcoins a long time to come for the majority share. In fact, this year, the market dominance of bitcoin feller 50%.
As ethereum’s market dominance has grown, it is important to look at what this might mean for the digital asset and how it may play out in the future. Ethereum has no doubt had an incredible run this year but does growing market dominance indicate a continuous rally?
Related Reading | Only In Crypto: A Croissant Explains Web3 And NFTs To Elon Musk
Ethereum Dominance On The Rise
Ethereum’s market cap had grown as a result of the price surge that the digital asset recorded this year. At almost $500 billion, it remains at only about half of bitcoin’s market cap but has grown to become one of the most valuable assets in the world. Following this, the market dominance of the altcoin has also risen as adoption of the asset had grown rapidly.
In the space of a year, the market dominance of the asset has grown 10%, taking most of the share from bitcoin. This has been an indicator of how much the cryptocurrency had grown, as well as some long-term implications.
ETH trading at $3,918 | Source: ETHUSD on TradingView.com
As ethereum continues to maintain such a large dominance of the market, it solidifies its place as one of the most valuable cryptocurrencies in the space. With its numerous use cases such as DeFi and NFTs, in addition to its real-world applications, it is expected that ethereum will continue to see a larger share of the market dominance.
What this will mean for the altcoin is pretty simple. With this kind of rapid adoption will come more demand and as the ETH burn continues to reduce the supply of coins in the market, the value of the digital asset could be hitting new highs in the coming months.
Altcoins Taking Control Of The Market
In a recent report from TradingPlatforms, it is outlined that altcoins have tripled their market dominance in the last seven years. At one point, bitcoin maintained over 90% of the market dominance. However, as more altcoins like ethereum have grown into prominence and seen rising adoption, this number has dropped significantly.
The report states that the rise in altcoin dominance has been a result of a mindset shift when it comes to cryptocurrencies. Many investors believe that bitcoin has already grown too much and is too expensive and as such, are looking at what they believe to be ‘the next bitcoin.’ This has led to the adoption of altcoins as an alternative to bitcoin.
Related Reading | Crypto Research Analyst Puts Ethereum At $9,000 In Six Months
The author also notes that higher market dominance translates to higher market caps, which in turn plays a major role when it comes to how a cryptocurrency is ranked. Investors will usually look at market caps to determine if a cryptocurrency is ‘safe’ to invest in and “in essence, it’s a pointer to how stable the asset is,” the report reads.
Going by this, ethereum may be headed for higher adoption as more investors look towards its market dominance as an indicator of its stability. This points to bullish tendencies as the new year rolls around.
Featured image from ElevenNews, chart from TradingView.com