As Ethereum's market dominance has increased, it's important to see what this could mean for digital assets and how it might develop in the future. Ethereum has undoubtedly had an amazing streak this year, but does rising market dominance indicates a further rally?
Ethereum's domination on the rising tide
Ethereum's market capitalization has risen as a result of the price spike that digital assets have seen this year. Currently, the market cap is around $500 billion. This is roughly half of the Bitcoin market cap. Nevertheless, ETH has grown into one of the world's most valuable assets. As a result, the market dominance of altcoins also increased.
During the year, ETH's market dominance grew by 10%. It was an indicator of how much the cryptocurrency has grown. It also shows long-term implications.
As Ethereum continues to hold such a large dominance in the market, it is cementing its place as one of the most valuable cryptocurrencies in the space. Due to numerous use cases such as DeFi and NFT, as well as real-world applications, Ethereum is expected to continue to gain a greater share of market dominance.
What this means for an altcoin is fairly simple. With this kind of rapid adoption, more demand will come. And as ETH burning continues to reduce the coin supply in the marketplace, digital asset value may reach new heights in the coming months.
Altcoins take control of the market
In a recent report by trading platforms, it was highlighted that altcoins have tripled their market dominance in the past seven years. At one point, Bitcoin was held by over 90% dominance. However, as more altcoins such as Ethereum have grown in importance and have seen increasing adoption, the number has dropped significantly.
Read also: JPMorgan Says Ethereum is Better than Bitcoin
The report states that the rise in altcoin dominance was the result of a shift in mentality when it comes to cryptocurrencies. Many investors believe that Bitcoin has already grown too much and is too expensive. Therefore, they are looking for what they believe is the "next Bitcoin". This led to the adoption of altcoins as an alternative.
The author also notes that greater market dominance translates into higher capitalization. This, in turn, plays a major role in how a given cryptocurrency is classified. Investors usually look at the market cap to determine if a cryptocurrency is "safe" to invest in. According to the reports, “it is indeed an indicator of how stable an asset is”.
That being said, Ethereum may be moving towards higher adoption as more investors look at its dominance as an indicator of its stability. This indicates a bullish trend in the new year.
Think we missed something? Let us know in the comment section below.