https://ift.tt/3qZEBuN dominance increases in January- The Cryptonomist

For a long time on the cryptocurrency market, we have been talking in terms of dominance by the queen Bitcoin and secondarily Ethereum over what are instead considered as altcoins. Up until a few years ago, the prevalence of Bitcoin’s capitalization over the others was over 60% and Ethereum’s was close to 30%.

How the dominance of Bitcoin and Ethereum has changed

According to research and analysis firm Statista, from 2011 to 2021, the dominance of altcoins grew by almost 30 percentage points, bringing Bitcoin’s below 40% and Ethereum’s below 20%.

Also according to a recent Statista report, Bitcoin’s dominance on January 17 reached its lowest point since May 2018 at 39.4%. Then, the decline in Ethereum’s dominance to 17.7% is singular, partly due to the respective increase in the dominance of cryptocurrencies such as Solana, Cardano and Polkadot, which together reach around 6% and are precisely among its fiercest competitors. 

But over the past two weeks, Bitcoin’s dominance seems to be recovering slightly, with it crossing the 40% level on January 19.

“Bitcoin’s dominance continues to decline, and recently reached its lowest level in just over three-and-a-half years. That’s largely because bitcoin’s correlation with the S&P 500 is now more prevalent, suggesting that investors are trading bitcoin and equities together as risk-on assets”.

said Jon Ovadia, CEO of cryptocurrency company OVEX, in an interview a few days ago.

Interesting is the data regarding stablecoins that, with $170 billion in total value, represent about 9% of the entire market capitalization at over $2 trillion and that of smart contract platforms, with over $738 billion, which instead represent almost 35%.

Finally, there is a curious figure regarding the market capitalization of meme coins, such as Dogecoin and Shiba Inu, which now weigh over 2% of the entire cryptocurrency market.

Non-Bitcoin digital payments on the rise

But the fact that Bitcoin’s importance is becoming less preponderant in the crypto ecosystem is also certified by a report from Bitpay Inc, one of the largest companies for digital currency payments.

According to the report, consumers and businesses are increasingly starting to use digital tokens other than Bitcoin for purchases, while the CEO of the same digital payments company, Stephen Pair, claimed in 2019 that more than 95% of payments were made with Bitcoin.

Last year, however, Bitcoin use at merchants using BitPay fell to about 65% of payments processed, down from 92% in 2020, the company said in a recent statement to Bloomberg news agency.

As for other cryptocurrencies used with Bitpay, purchases with Ether accounted for 15% of the total, stablecoins 13% and new coins added to BitPay in 2021, such as Dogecoin, Shiba Inu and Litecoin, accounted for about 3%.