While crypto prices are generally going down, ETH is getting a larger slice of a smaller pie. Here’s the main set of indicators we look at (refresher at the end for those who want to review) that got us to this conclusion.
Here’s a brief explanation of each line.
- Meaning of Blue Line – BTC market dominance relative to the rest of the industry. As of Aug. 25, 2022 BTC market dominance is 40.46%.
- Meaning of Red Line – ETH market dominance relative to the rest of the industry. As of Aug. 25, 2022 ETH market dominance is 20.03%.
- Meaning of Yellow Line – BTC is continuing to lose Market Dominance to ETH + Alt-Coins.
Here’s an analysis of all that.
Bitcoin continues to lose Market Dominance, so too does our composite measure of ETH + Alt Dominance. ETH however, is picking up. For the combined dominance of ETH + alt-coins to go down, but for ETH’s individual dominance to increase, means that the Alt-coins are significantly losing Dominance.
Hence, ETH is getting a larger slice of a smaller pie. The other areas of the crypto world are giving up their market share to ETH.
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What do these things all mean? A Refresher.
- What is Market Cap?
- Market Cap = price per coin * the total number of coins in circulation. It’s a way of measuring the value of a blockchain project.
- The total market cap = the sum of all blockchain projects together
- What is BTC Dominance?
- Market cap of BTC / Total market cap
- What is ETH Dominance?
- Market cap of ETH / Total market cap
- What is the Alt-Dominance?
- This is a composite measure we developed for this analysis. It = ETH dominance + other alt-coin dominance
- Notably this measure excludes most DeFi and large L1 projects (which tend to move with ETH)
- Why does this matter?
- Market Dominance quantifies a coin’s level of maturity within the overall market. Cryptocurrencies need to gain market share in order to succeed and keep expanding.