Despite the influx of capital into spot Bitcoin ETFs, the expected positive influence on Bitcoin’s price has yet to materialize. In fact, Bitcoin experienced a decline of more than 5% following the recent approvals. On the other hand, Ethereum recorded an almost 8% rise during the same period, despite struggling to sustain the $2,600 level. This surprising trend indicates that Ethereum’s market dominance over Bitcoin continues to surge.
According to on-chain analytic firm Santiment, Ethereum’s market dominance over Bitcoin has seen a significant rise. In just a week, there was an increase of more than 22.4%. Additionally, an average of 89.4k new Ethereum addresses were generated daily, highlighting the network’s growing popularity. On January 16th alone, 96.3k wallets were created. These numbers reflect the increasing appeal of Ethereum, and they could potentially allow the altcoin to further decouple from the rest of the crypto market.
Forward Rates for Bitcoin and Ethereum
A recent analysis by QCP Capital revealed that both Bitcoin and Ethereum forwards have seen a decrease. The 1-month forward rate for Bitcoin dropped from a peak of 32% annually to a minimum of 9%, representing a decrease of 23%. Similarly, the 1-month forward rate for Ethereum decreased from a high of 28% to 12%, marking a reduction of 16%. Despite these decreases, QCP Capital suggests that ETH forwards still offer attractive yields, paying 11-13% annually. They also view selling ETH 1m 2200 Puts as a decent play, with yields above 21% annually. Furthermore, if there is a dip into the potential ETH spot ETF approvals, it could be a good opportunity to buy.
Looking ahead, there are significant upcoming events that may impact the crypto market. The Bitcoin halving is scheduled for mid-April, and there is potential approval of spot Ethereum ETFs starting in May. These events have the potential to further drive the appeal of Ethereum and shape the market’s direction. It’s important to note that broader macroeconomic events may also play a role in influencing the market dynamics in the short term.
Declining Supply of Ether on Exchanges
Santiment’s data shows that the supply of Ether on crypto exchanges has been consistently declining. Over the last ten days, the figure has dropped from 8.18% to 8.10%. This decreasing supply indicates that Ether holders are moving their assets from exchanges into long-term storage, anticipating a price rise. In fact, the current supply is nearing an all-time low of 8.05%.
The Future of Ethereum’s Dominance
With the increasing market dominance of Ethereum and its growing popularity, it is clear that it is becoming a formidable player in the crypto market. The planned network upgrades, starting with the Dencun hard fork, and the potential approval of spot Ethereum ETFs further contribute to the bullish perspective surrounding Ether. As Ethereum continues to evolve and market dynamics shift, it will be interesting to see if it can maintain its dominance or even surpass Bitcoin in the future.
Ethereum’s market dominance over Bitcoin has significantly increased in recent weeks. Despite the disappointing impact of Bitcoin ETFs on Bitcoin’s price, Ethereum remains resilient and continues to rise. The upcoming events, declining supply on exchanges, and growing popularity all contribute to the bullish outlook for Ethereum. As the crypto market evolves, Ethereum’s dominance may continue to strengthen, making it a force to be reckoned with in the digital asset space.
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