Bitcoin’s Lead Over Ethereum Being Eaten Away
BTC recovered well from the April sell offs, since last week there were two happy days of +$4k pumps, and not much downside in between. It faces another climb up Mount $60k. Meanwhile, if your eyes shifted to DOGE, let’s draw them back to ETH, as it’s currently pushing new highs at $3.2k on its 8-day and counting win streak, along with most of its ecosystem. Despite how expensive it is, everyone on the Ethereum network still needs gas, and prices at the pump might be cheapest at 3am on a Sunday.
DeFi protocols and platforms are booming in general, with Total Value Locked breaking $120b. Most of the action seems to be running on Ethereum, with at least $70b in its decentralised apps. Lending and DEXes are the most popular, having $36.7b and $23.9b locked in each, respectively. Even other sectors like insurance and derivatives are growing. The non-fungible token movement continues to gain popularity, and whether any of those are valuable or not, ETH is needed to move them. We truly can’t escape fees.
Just like Wall Street isn’t the only street with buildings and banks, Ethereum isn’t the only base layer capable of supporting an ecosystem. Let’s look at other layer 1 protocols and smart contract platforms as adjacent developing roads that will eventually have dapps built on them too. And just like we’ve seen urban sprawl, we’ll probably see crypto sprawl. Other dapps on different networks may end up better or worse than the first built on Ethereum, but they may also come with different levels of service, price, and convenience.
Even with this new high in ETH, there is still a $725b market cap gap between it and BTC. The ETH overtaking BTC “flippening” is still a long way off, but ETH continues to eat away at BTC’s dominance which now stands at under 50% (47% at the time of writing) and ETH at 15% of total cryptos.
By Justin Chuh, Senior Trader at the regulated digital asset investment manager Wave Financial.