Bitcoin (BTC) could be price greater than Ethereum (ETH), however accessible Glassnode knowledge, as analyzed by CryptoSlate, reveals that ETH’s peak dominance has outperformed BTC’s within the final two years.
Glassnode’s BTC-ETH Market Dominance metric is an oscillator that tracks the macro efficiency traits for the highest two cryptocurrencies. The market cap dominance reductions misplaced and long-dormant cash, offering a mannequin that precisely assesses the capital inflows and outflows of the belongings. This metric considers BTC and ETH’s market cap alone.
The chart above reveals that Ethereum had its peak market dominance way back to 2017, even earlier than the asset’s realized market cap peak. ETH additionally noticed its dominance return in 2018 and has maintained it since late 2021.
BTC peaked in the course of the bear market interval between the tip of 2018 and early 2021 — displaying that it’s a higher asset in the course of the risk-off atmosphere.
A risk-off atmosphere describes a bear market scenario the place traders exit dangerous belongings like shares and hedge their funds in safe-haven investments like gold and bonds. This would possibly clarify why many analysts and traders contemplate Bitcoin digital gold.
However, ETH trades higher in a risk-on atmosphere when traders are extra keen to place their funds into dangerous belongings. This is the reason ETH’s dominance flipped that of BTC because the early bull run of 2021 and has maintained that efficiency till now. Ethereum’s dominance over BTC when it comes to realized market cap peaked at over 0.765, in keeping with the Glassnode chart under.
Nonetheless, ETH’s dominance over the previous two years has not translated into higher efficiency for the asset. Its dominance has regularly declined since 2017, with all different peaks in 2021 and 2022 failing to beat the earlier highs. The rationale behind this decline stays unknown.
Nonetheless, the success of the Ethereum Merge has seen the asset flip deflationary a couple of instances, and its issuance charge has considerably declined. Stories have recommended that the asset could be regularly turning right into a retailer of worth primarily based on the conviction of long-term holders.
With the markets changing into extra bearish once more, BTC is already displaying indicators that it may outperform ETH in a risk-off atmosphere. It has surpassed Ethereum within the final 60 days.
A number of knowledge and market analysts are predicting a recession in 2023; this might proceed to play into BTC’s power of being a safer asset in a risk-off atmosphere.