The share of Bitcoin’s market capitalisation as a percentage of the overall crypto market cap has fallen sharply this year, as other cryptocurrencies (or altcoins) have outperformed the world’s top cryptocurrency.
According to the Bitcoin Dominance Chart on CoinMarketCap, Bitcoin’s m-cap as a percentage of overall crypto m-cap has fallen from a peak of nearly 70 percent in January this year to about 43 percent now.
The fall in Bitcoin’s m-cap is the result of investors picking up altcoins whose technology offers the creation of platforms such as decentralised apps, non-fungible tokens and other innovations. This fall in Bitcoin’s market share is despite the fact that the cryptocurrency has also been doing well – reaching a fresh high breaching $68,000 on Tuesday.
According to Coin Market Cap, the big winners in the market cap race are Ethereum, whose market cap has risen from about 13 percent to nearly 20 percent now. Ethereum, the world’s second-largest cryptocurrency after Bitcoin, is up 553 percent in 2021, against Bitcoin’s 130 percent gains.
Some of the other cryptocurrencies that have gained sharply are Cardano and Solano, which commanded a 0.74 percent and 0.1 percent market share, respectively. This is now up to 2.4 percent and 2.7 percent, respectively.
In fact, Solana -- which is billed by some as a “third-generation” cryptocurrency, compared to Bitcoin (first generation) and Ethereum (second-gen) – is up a whopping 13,200 percent since January.
The rise in prices of altcoins also comes amid a series of bullish projections by firms such as Goldman Sachs and JP Morgan.
In a recent note, Bernhard Rzymelka, director of global markets at Goldman Sachs, noted that Ethereum is “far from realizing its full potential” and laid out at a target of $8,000 for the cryptocurrency. Ethereum currently trades at around $4,800.
Unlike Bitcoin, which only functions as a currency, the Ethereum network offers a bunch of other capabilities such as smart contracts, DeFi and NFTs. However, even Ethereum has faced challenges in the form of slow transaction times, something that so-called “Ethereum killers” such as Cardano and Solana are aiming to solve.
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The excitement about altcoins has also risen following Facebook’s rebranding as Meta, with the company aiming to create a “metaverse” that will offer a multitude of apps and services in an integrated ecosystem, some of which may be powered by the technology that underpins cryptocurrencies.
The general rise in crypto-assets has also been marked by an increase in prices of so-called “memecoins” such as Dogecoin and Shiba Inu. The cryptocurrencies, promoted by maverick entrepreneur Elon Musk, are up 4,737 percent and a staggering 70 million percent, respectively.
(Edited by : Abhishek Jha)