When Bitcoin was officially launched by Satoshi Nakamoto on January 3, 2009, there was nothing else, and Bitcoin had no competition let alone rival digital currencies. Despite the emergence of a few competing projects, Bitcoin still held over 90% of the global cryptocurrency market when Ethereum was launched in July 2015. Its good resistance to crises and low correlation with other markets already made it a popular asset for insiders despite its volatility.
Just before the speculative madness at the end of 2017, Bitcoin’s weight had dropped below 40%, and that of Ether, born two years earlier, was approaching with 31% market share:
This will be the record for Ethereum.
The Ethereum network and its currency benefited from the ICO boom at the time. It is the Ethereum blockchain that was used in majority for these projects. It then benefited like others from the development of decentralized finance and for the past three years from the craze for non-fungible tokens or NFT, these certificates of ownership of works or assets.
The correlation between BTC and ETH remains very strong
Today, Ether has half the weight of Bitcoin in the world’s capitalization, around 19% versus 40%. The two leaders have seen the arrival of more than 20,000 cryptos, but the vast majority of them do not have the critical size and are only Sh*tcoins.
The top 20 cryptocurrencies currently capture 88% of the market.
For a while, Solana appeared as a new competitor for Ethereum, but its problems have since damaged its credibility. In terms of their price behavior, the two leading cryptos are twins. Their correlation is very strong, at 90% this year. They have rarely moved apart in their history.
Bitcoin, which is six and a half years older, still has the edge in performance for investors. Its price has increased 27 million times since its debut on the markets ($0.0008), compared to 5,300 times for Ether. Since 2020, however, the latter has seen its price multiply by 13, while Bitcoin has seen its price multiplied by 3.
A gap that may annoy some who are disappointed that many new entrants are taking too long to understand that the real revolution is on the side of Bitcoin. The Ethereum community is trying to be more pragmatic by recognizing the need for Bitcoin, but not without being hyper-ambitious for the future.
Flagship event with ”The Merge”
The prospect of Ethereum’s technological Big Bang “The Merge” on September 15, has led to a better performance of Ether compared to Bitcoin in the market rebound. Ether is capturing attention and discussion on social networks and forums. Volumes on Ether have surpassed those of Bitcoin, according to data aggregated by Kaiko Research across the top 10 platforms.
Traders seem to anticipate a good performance of Ether until the end of September 2022 with a price above $2,200 or even $5,000 for the most optimistic, compared to $1,540 currently. The surge would be followed by a correction and some have already bought put options for the end of 2022 …
Others are betting mainly on the jump in its volatility thanks to derivatives, without taking sides in a given direction (rise or fall of the price) given the uncertainties on the evolution of the crypto market. For the first time, positions in Ether options are larger than those in Bitcoin. Very high volumes have been seen in Ether calls this summer. Trading firms and hedge funds are looking to capitalize on a key event in what has been a dismal year for the markets.
Ethereum fans are even hoping that “The Merge” will mark the beginning of the realization of their big dream: the Flippening. This event is the hypothetical moment when Ethereum’s market cap will exceed Bitcoin’s. I personally don’t believe in it, but only the future will be able to answer this question with certainty.
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