Business

Cryptoverse: Ether snaps at bitcoin’s heels in race for crypto crown

Souvenir tokens representing cryptocurrency Bitcoin and the Ethereum network, with its native token ether, plunge into the water in this illustration, taken May 17, 2022. REUTERS/Dado Ruvic/Illustration

Register now for FREE unlimited access to Reuters.com

13 Sept. (Reuters) – For years, ether could hardly dream of challenging its big brother bitcoin. Now his ambitions can become more realistic.

Read:FM engagement encouraged following market turmoil

The second-largest cryptocurrency is taking market share from bitcoin, ahead of an all-important “Merge” software upgrade that could greatly reduce the power consumption of its Ethereum blockchain, should the developers pull it off in the coming days.

According to data platform CoinMarketCap, Bitcoin’s dominance, or its share of the crypto market’s market value, has fallen to 39.1% from this year’s peak of 47.5% in mid-June. Ether, on the other hand, has risen from 16% to 20.5%.

Register now for FREE unlimited access to Reuters.com

The upstart is still a long way from overtaking bitcoin as the No. 1 cryptocurrency, a reversal known to enthusiasts as “the flippening.” However, it is made up; in January 2021, bitcoin reigned supreme at 72%, while ether took a slim 10%.

Read:Tornado Cash code reuploaded to GitHub in free speech test • The Register

Price wise, one ether is now worth 0.082 bitcoin, close to the December 2021 highs and sharply above the 2022 low of 0.049 in June.

“People now essentially view Ethereum as a safe asset because they’ve seen the success of the network, they think it’s not going anywhere,” said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.

“There is a permanence in how Ethereum is perceived in the crypto ecosystem.”

Reuters Graphics

WILD CRYPTOCK

The Merge, expected to happen Thursday after several delays, could lead to wider use of the blockchain, potentially driving the price of ether — though nothing is certain in an erratic crypto market. read more

Ethereum forms the backbone of much of the “Web3” vision of a crypto-centric internet driving applications involving crypto offshoots such as decentralized finance and non-replaceable tokens — although this much-hyped dream still hasn’t come. has been realized.

Bitcoin and ether have both nearly halved this year amid concerns about huge central bank interest rate hikes. Nevertheless, investors seem to like the look of the Merger, with ether up more than 65% since late June. Bitcoin has barely grown over the same period.

Read:Inside the ‘crazy’ decisions that left Britain with no gas storage and vulnerable to Putin

“We are going to see the attractiveness of (ether) for some investors who are concerned about energy consumption,” said Doug Schwenk, CEO of Digital Asset Research, although he warned that ether was still a long way behind bitcoin.

THE KING IS STRONG

The declining bitcoin dominance in the current crypto bear market is a departure from previous market cycles as investors sold smaller tokens – “altcoins” – in favor of the more liquid and reliable bitcoin.

Dethroning the king is not an easy task, however.

Bitcoin is still by far the most well-known cryptocurrency. Regular investors who have dipped their toes into the crypto market since 2020 tend to turn to bitcoin first, as the most liquid and most traded token.

Its $427 billion market cap is still more than double Ether’s $210 billion, and market participants are confident that the original digital coin will remain the gold standard in crypto due to its limited supply.

Some market players say bitcoin’s hold on the crypto crown is still strong, even if it has to accept other contenders. For example, Hugo Xavier, CEO of K2 Trading Partners, said his dominance could improve to 50%-60% if the crypto market turns bullish, but it is unlikely to reach 70% again.

Register now for FREE unlimited access to Reuters.com

Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru; Editing by Tom Wilson and Pravin Char

Our Standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias under the Trust Principles.

Previous post
We review the wearable gadgets that can boost your health
Next post
Liz Cheney says new revelations reveal true ‘danger’ of Donald Trump