The recent surge in Ether’s (ETH) value has caused Bitcoin’s (BTC) dominance rate to drop from its almost two-year record high, according to TradingView data. BTC’s dominance rate had risen to 49.06% earlier this week before sliding to 48.12% as ETH’s value increased. The last time the metric was this high was in July 2021, some 21 months ago. In contrast, ETH’s dominance rate surged to 19.87% on Thursday, marking a one-month high.
The BTC dominance rate is the market capitalization of BTC’s share of the total cryptocurrency market cap. This metric is important in assessing the relative strength of BTC, the largest cryptocurrency by market value, compared to the broader crypto market. It is also used to identify periods when altcoins outperform, known as an altcoin season. Similarly, Ether dominance shows the second-largest cryptocurrency’s relative value to the crypto market. Ether’s impressive performance has reduced Bitcoin’s share of the crypto market.
The shift in market dominance came after the successful deployment of the Ethereum network’s long-awaited tech upgrade, known as Shanghai or Shapella, on Wednesday. The upgrade allowed for the withdrawal of more than 17.4 million staked tokens, worth around $35 billion, from Ethereum’s proof-of-stake blockchain for the first time since its launch in December 2020. The successful deployment eliminated a slight but concerning risk that ETH investors might not be able to reclaim their tokens locked up in staking contracts.
Following the upgrade, ETH rose as high as $2,023 on Thursday, gaining 5% in the past 24 hours, according to CoinDesk data. This led to an upswing in the broader crypto prices. BTC also reacted positively to the upgrade, but only increased by 1.5% through the day, lagging behind altcoins.
The surge in ETH’s value and the drop in BTC’s dominance rate could be indicative of a shift in the crypto market. While BTC has long been considered the gold standard of cryptocurrencies, the rise of Ether and other altcoins may signal a changing tide. It remains to be seen whether this trend will continue or if BTC will regain its dominance in the coming weeks and months.
Overall, the recent developments in the crypto market have sparked excitement and speculation among investors and analysts alike. As always, caution is advised when investing in cryptocurrencies, as the market is notoriously volatile and unpredictable.