Key Points
- Ethereum’s market dominance has decreased to 13%, reflecting a decreased demand, increased supply, and Bitcoin’s rising dominance.
- Bitcoin has outperformed Ethereum over the past year, with Bitcoin gaining over 120% YoY and Ethereum only around 50%.
Ethereum’s market dominance has dipped to lows of around 13%.
This decline follows a decrease in demand, an increase in supply, and the rising dominance of Bitcoin.
Ethereum’s Underperformance
Over the past year, Ethereum has underperformed when compared to Bitcoin. For instance, Bitcoin has seen a YoY gain of over 120%, while Ethereum has only gained around 50%.
This underperformance has led to a significant drop in Ethereum’s market dominance, which currently stands at 13.85%, a significant decrease from its yearly high of nearly 20%.
Several factors have contributed to this decline in Ethereum’s dominance and its underperformance against Bitcoin.
One of these factors is the rising dominance of Bitcoin, which has seen a significant increase this year. High demand for spot Bitcoin ETFs has been a key trigger for this rise in dominance.
Ethereum’s Declining Dominance
Another factor contributing to Ethereum’s declining dominance is the selling activity of whales.
For example, on October 8th, a large address that participated in the 2014 Initial Coin Offering (ICO) deposited 5,000 ETH to Kraken, valued at $12M.
This whale has deposited around 50,000 ETH valued at $125M to exchanges in the last two weeks.
In addition, the Ethereum Foundation has been selling off its holdings since the beginning of the year, contributing to Ethereum’s underperformance.
If this uptick in whale selling activity continues without a corresponding rise in demand, ETH could continue trading rangebound if new buyers fail to enter the market.
Unlike Bitcoin, Ethereum has seen low demand for its spot ETFs.
Since these ETFs launched in July, they have recorded $849M in outflows, largely due to the Grayscale Ethereum Trust.
This weak demand has failed to drive gains for Ethereum, which has further contributed to a decrease in dominance.
Ethereum is also dealing with a declining burn rate as the coin becomes inflationary.
In the last 30 days, more than 43,000 ETH tokens were added to the circulating supply, according to data from Ultrasound Money.
This rising supply, coupled with the lack of fresh demand, is likely to increase sell-side pressure on Ethereum, causing it to lose further market share to Bitcoin and other altcoins.
Ethereum’s falling dominance has also contributed to weakening market sentiment.
Most traders are bearish on Ethereum, while smart money or institutions remain bullish.
