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Highlights
- In the beginning of 2021, Bitcoin enjoyed a bigger market share of 70%. A year later in 2022, the dominance has fallen drastically to just 39% as per CoinMarketCap.
- Ethereum’s dominance was just at 13.89% at the start of 2021, but now has moved up to 20.13%.
- Other cryptos too have gained grounds as it significantly improved its dominance percentage to be currently placed at 40.33% from 17.44%.
For long, Bitcoin has been the dominant crypto in the market. Not only it has enjoyed a bigger market share, but it also has a major fan base since its launch. But recently, Ethereum seems to have caught up with it largely due to its utility value and DeFi and NFT boom.
Ethereum has gained approximately 6.24% in 2021 and could well surge further in 2022 if NFT boom reaches new high. Ethereum’s dominance was just at 13.89% at the start of 2021, but now has moved up to 20.13%.
Bitcoin, on the other hand, has seen a drastic fall in market dominance. The leading crypto started the 2021, enjoying a bigger market share of 70%. But come 5 January 2022, the dominance has fallen drastically to just 39% as per CoinMarketCap.
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It’s not just about Bitcoin and Ethereum, in fact, other cryptos too have gained significant grounds over the past year. Other cryptos have gained grounds as it significantly improved its dominance percentage to be currently placed at 40.33% from 17.44% at the start of 2021.
Also read: How Bitcoin will shape up in its 13th year
Reason for Bitcoin losing share
Bitcoins, for majority of time, have remained as the No. 1 crypto by market cap largely due to its scarce nature. Therefore, the retail and institutional investors used to see it as major cryptocurrency which has store value. But ever since Ethereum was launched and other cryptos found their way to the market, it has been losing its grip as favourite crypto.
Today, more and more investors are turning to altcoins, which meant that Bitcoin is in competition with over 15,000 cryptos. Besides, the rise of Ethereum as a major force also has reduced Bitcoin’s dominance. Today, Ethereum is considered to be the most preferred blockchain. As compared to Bitcoin, Ethereum’s market cap too is increasing drastically.
Image source: Trading view
Ethereum’s rise is also due to incredible rise of non-fungible tokens (NFTs) and decentralized finance (DeFi), which have brought massive investments to the Ethereum blockchain. Many experts believe that by the end of 2022, Ethereum could well be the dominant crypto as on marketcap.
Also read: Top 10 cryptocurrencies beyond Bitcoin to watch in 2022
Other cryptos outperforming Bitcoin as well
And it is not just Ethereum, other altcoins too have started to outperform Bitcoin. Altcoins rising on the metaverse wave, have dented Bitcoin in a big manner. Tokens such as Chainlink, Algorand, Solana, Polygon, etc. have managed to gain significant returns, even when the Bitcoin prices fluctuated rapidly.
Image source: Trading view
In fact, industry expert such as Peter Schiff recently tweeted that with the growing competition, Bitcoin for the first time is losing its first-mover competitive advantage.
Conclusion
Bitcoin losing its market dominance could well give other projects a lead. Though Ethereum does have its limitations at present, but the major Ethereum 2.0 upgrade could change all of that as it would fully transform ETH from a PoW model to PoS model.
From the investor’s perspective, the rise of altcoins is in fact good news as it has opened up different avenues of investment. BTC’s dominance drop could also open up opportunities for other projects to significantly move up the ladder and become a force to reckon with.
