Why is Ether up 40% in 7 days? Is Bitcoin’s dominance fading?

Highlights

• Proof-of-work (PoW) is regarded as energy-extensive, while proof-of-stake (PoS) saves energy costs
• It is being anticipated that Ethereum’s blockchain will become PoS-driven by as early as September this year
• The ETH token’s share in the total market cap of the crypto world is on a rapid rise, thanks to a rally in price

The ongoing rally in the cryptoverse is arguably being driven single-handedly by one asset -- Ethereum (ETH). For the first time in many weeks, the total market cap is again over US$1 trillion.

Bitcoin (BTC), which holds dominance like no other cryptoasset, still has over 40% share in the total market cap. But with the unexpected surge in the price of Ether, the altcoin’s share is also rising. CoinMarketCap data suggests that over the past one week, Ether’s share has gained nearly three percentage points, from 15% to 18%.

Why is Ethereum on a rise, and will it be able to hold on to this rally in the medium to long term? Let us explore the possibilities.

Why is Ether rising?

ETH is rising on arguably one sentiment alone -- Ethereum’s blockchain move toward proof-of-stake. According to reports, Tim Beiko, one of Ethereum’s developers, has recently talked about the much-awaited ‘merge’ of the blockchain. The Merge, as it is called, might happen in mid-September this year.

For the uninitiated, The Merge is nothing, but Ethereum’s move from proof-of-work (used by Bitcoin) toward proof-of-stake. The latter method of consensus is used by newer blockchain networks of Cardano, Solana, and many others. Interestingly, these newer networks boasted the PoS credential in their early stages, which might be one reason why Solana’s native SOL token rose sharply last year. Both SOL and ADA (the native token of Cardano) are among the top 10 cryptos by market cap.

It is expected that The Merge will drive the Ethereum network toward less consumption of power. This is because miners will not be rewarded, and it will be the stakers of tokens who will verify any transaction.

Data provided by CoinMarketCap.com

Also read: Is India’s RBI banning cryptocurrencies?

Will Ether’s rise continue?

Nothing can be predicted considering all that has happened this year. From the fall of TerraUSD to major participants like Voyager and Three Arrows halting operations, consistent blows have been dealt to the cryptoverse. Bitcoin, Ether and mostly every other asset are in the red on a year-to-date (YTD) basis.

Even though a few analysts might say that The Merge is a big event, Solana, and Cardano, which already are PoS networks, are also deeply in the red this year. For how long the rally in Ethereum will last is a very speculative debate.

Bottom line

The Ethereum blockchain’s looming merge is said to be fueling the rally in the ETH token. The final date of Ethereum’s shift to PoS is still a matter of speculation. But amid all this, ETH’s share in the market cap of the cryptoverse is on a rise. Bitcoin’s price is also in the green over the past few days, but its dominance is fading.

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