In this May 17, 2022, illustration, souvenir tokens representing the cryptocurrency Bitcoin and the Ethereum network are submerged in water with their native token ether. REUTERS/Dado Ruvic/Illustration
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Sept 13 (Reuters) – For years, ether could not dream of challenging its big brother, bitcoin. Now his ambitions can come true.
The second-largest cryptocurrency is taking market share from bitcoin ahead of its all-important “Union” software upgrade that could drastically reduce the Ethereum blockchain’s energy use if developers pull it off in the coming days.
Bitcoin’s dominance, or market share of the cryptocurrency market, has fallen to 39.1% from this year’s peak of 47.5% in mid-June, according to data platform CoinMarketCap. Ether increased from 16% to 20.5%.
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The startup is still a long way from overtaking bitcoin as the No. 1 cryptocurrency, a turnaround known by enthusiasts as “flipping.” Although it consists of earth; In January 2021, bitcoin dominated at 72% and ether at 10%.
As for the price, one ether is now worth 0.082 bitcoins, close to the December 2021 high and sharply above the June 2022 low of 0.049.
“People now look at Ethereum as essentially a safe asset because they think it’s not going anywhere because they’ve seen the success of the network,” said Joseph Edwards, head of financial strategy at fund manager Solrise Finance.
“There is a permanence in how Ethereum is perceived in the crypto ecosystem.”
CAPRICORN CRYPTO
The Merger, which is expected to take place on Thursday after several delays, could lead to wider use of the blockchain, potentially boosting the price of ether — though nothing is certain in the fickle cryptocurrency market. read more
Ethereum forms a key part of the “Web3” vision of a crypto-centric internet, powering applications involving cryptocurrencies such as decentralized finance and fiat tokens – although this much-hyped dream has yet to be realized.
Bitcoin and ether have roughly halved this year due to concerns about central banks raising interest rates. Nevertheless, investors like the look of the Merger with Ether up more than 65% since late June. Bitcoin has almost depreciated over the same period.
“We’re going to see (ether’s) appeal to some investors who are concerned about energy consumption,” said Doug Schwenk, CEO of Digital Asset Research, although he cautioned that ether still lags well behind bitcoin.
THE KING IS STRONG
Bitcoin’s upside in the cryptocurrency’s current bear market is a shift away from previous market cycles, when investors sold fewer tokens — “altcoins” — in favor of the more liquid and secure bitcoin.
Deposing a king is not an easy task.
Bitcoin is still the most popular cryptocurrency. Major investors dipping their toes into the cryptocurrency market since 2020 have tended to turn primarily to bitcoin as the most liquid and widely traded token.
Its $427 billion market cap is still more than double Ether’s $210 billion, and market participants strongly believe that the original digital coin remains the gold standard in cryptocurrency due to its limited supply.
Some market players say bitcoin’s hold on the cryptocurrency crown is still strong, even if it has to accept other contenders. For example, Hugo Xavier, CEO of K2 Trading Partners, said that if the cryptocurrency market were to rise, its dominance could improve to the 50%-60% range, but it was unlikely to touch 70% again.
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Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru; Edited by Tom Wilson and Pravin Char
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