In a crypto market grappling with a downturn, Ether (ETH), the second-largest digital currency, is ceding ground to Bitcoin, the most widely-held digital asset. Since June, ETH has slumped approximately 18.0%, while Bitcoin’s (BTC) decline has been roughly half that. On Monday, a significant dip of 5.4% to $1,639 signalled ETH difficulty, while BTC slipped 2.3% to $27,290.
Shifting Dominance in Market Capitalization
These fluctuations are reshaping the market dynamics. Ether’s share of the total capitalization has slipped from 18.4% at the start of the year to 17.8%. In contrast, Bitcoin’s dominance has surged from 40.0% to 50.3%.
Recent weeks have brought concerns about Ethereum’s trajectory. Network activity has waned, and the coin’s supply has started to grow again after months of deflation. Fears of centralization within the Ethereum network have also gained traction. These factors, along with potential interest rate hikes and turmoil in the Middle East, have led many crypto investors to flock towards Bitcoin, historically known to outperform in bear markets.
Is Bitcoin Dead? Bitcoin’s Resilience and Ether’s Lag
Bitcoin’s performance is notable, boasting a 66.0% increase this year compared to Ether’s 32.0%. This disparity becomes even more apparent when analyzing data since September 15, 2022, when Ethereum underwent a crucial network upgrade.
According to a report from researcher Kaiko, “Ether has been massively underperforming the broad market since the Merge, with both the Ethereum in dollars price and volume ratio trending downwards over the past year.” This indicates a significant preference for Bitcoin recovery, especially in bearish market conditions.
The Ethereum Foundation’s Move: Free Ethereum?
The Ethereum Foundation’s recent move to sell approximately $2.7 million worth of Ether has also added pressure. The foundation converted this amount into stablecoin USDC, a decision that is being closely observed in the crypto community.
Despite these shifts, some remain optimistic about Ether’s future. Crypto entrepreneur Justin Sun emphasized that he was “not selling” and was merely rearranging his holdings between wallets.
The recent introduction of futures-based Ether exchange-traded funds in US markets failed to generate the anticipated boost, indicating that market sentiment remains complex and multi-faceted.
In conclusion, Ether (ETH) faces difficulties in a bearish market, while Bitcoin (BTC) remains resilient. ETH has declined 18.0% since June, with a 5.4% drop to $1,639, while BTC’s decline is half as much. These trends indicate a preference for Bitcoin, especially in bearish conditions. Despite these challenges, some are optimistic about Ether’s future. Geopolitical events, like those in Israel, highlight the global impact on cryptocurrencies and the crypto market’s dynamic nature.