Booming DeFi and NFT markets and a record-setting Ether have contributed to Bitcoin's bad week.
For the first time in three years, Bitcoin’s market dominance dropped below 50% today as No. 2 cryptocurrency Ether hit record highs during a roaring altcoin season.
Priced at $52,754 at the time of writing, Bitcoin’s dominance stood at 49.7% — meaning it is no longer worth more than all altcoins combined. To make matters worse, BTC has also lost its prized $1 trillion market cap.
There’s no threat of Bitcoin losing its position as a market leader anytime soon, however, as Ether has a market share of just 14.5% at present.
Historically, Bitcoin falling below 50% market dominance has marked the start of an altseason.
Indeed, Bitcoin’s loss of status comes as both the decentralized finance (DeFi) and non-fungible token (NFT) market explode — pushing cryptocurrencies Cardano, Polkadot, and Uniswap into the top 10.
The first quarter of 2021 “was defined by the return of altseason and the rise of NFTs,” said Joshua Frank, CEO of digital asset data provider TheTie, in its Q1 2021 Quarterly Report. He added:
"Bitcoin dominance fell significantly as retail and crypto-native institutional investors turned to alts attracted by the prospect of massively outsized returns. Similarly, NFTs surged, achieving mainstream adoption faster than anyone in the space thought possible. While I remain skeptical that the NFT wave will continue at this pace, I think market conditions remain extremely bullish for altcoins relative to Bitcoin as money continues to pour into crypto in record amounts."
A Bull Changes Direction
RealVision CEO Raoul Pal tweeted out that while he remains “a massive BTC bull,” he is considering selling off his Bitcoin to buy Ether, which he says is “is rapidly becoming the currency of the digital world.”
Ether set a new all-time high today, breaking past $2,600 for the first time and reaching a new record of $2,641.09. Pal said:
"When you price anything up in DeFi, NFT, community tokens or even metaverse worlds, everything is basically priced in ETH, including designers time etc."
By contrast, he called Bitcoin its “pristine collateral and base layer.”
