Ether, the second-largest cryptocurrency by market capitalization after Bitcoin, has surpassed the psychological barrier of $2,000 following the Shapella upgrade this week. As a result, Bitcoin’s market dominance has declined, and Ether’s market share has climbed to 19.8%, an over 1.1% boost in the last 24 hours. According to data from btctools.io, since the beginning of the year, ETH dominance has increased by 7.6%.
Bitcoin’s market dominance has fallen to 47.7% as Ethereum’s market share increased. The post-Shapella ETH rally has knocked BTC off an almost two-year high in terms of market share. BTC’s market share tapped 48.8% on April 12 following its rally to $30,000, the highest it’s been since July 2021 when it came just shy of 50%. Additionally, BTC has not been over 50% dominant since April 2021.
BTC’s dominance remains up 13.6% since the beginning of the year, according to TradingView data. The market share rise in both BTC and ETH has been at the expense of altcoins, most of which have been lackluster during the recent rally of the two top coins. Bitcoin and Ether combined represent around 68% of the total crypto market. Roughly 10% is stablecoins meaning the other 10,800 or so tokens, as listed on the price analytics platform CoinGecko, have a combined share of just 22%.
Market dominance is calculated by looking at an asset’s market capitalization compared with the total crypto market cap, which is currently at an eleven-month high of $1.33 trillion.
ETH prices have surged 10.25% over the past 24 hours. As a result, the asset tapped an eleven-month high of $2,122 during the April 14 morning Asian trading session according to Cointelegraph data. Ether momentum has been driven by a successful Shapella upgrade on April 12 which released staked ETH on the Beacon Chain.
BTC has managed a 2% gain on the day reaching an intraday high of $30,862 during the April 14 morning Asian trading session.
The rise in Ether’s market share comes as the top cryptocurrency is growing in popularity for its use in decentralized finance (DeFi) and non-fungible tokens (NFTs). DeFi is an ecosystem of decentralized applications built on blockchain technology that aims to disrupt traditional financial systems by offering financial services without intermediaries. NFTs, on the other hand, are unique digital assets that are verified and secured by blockchain technology, making them rare and valuable.
The release of Ethereum 2.0, which will switch the cryptocurrency’s consensus algorithm from Proof of Work to Proof of Stake, is also expected to contribute to Ether’s rise. In the Proof of Stake consensus algorithm, instead of miners verifying transactions by solving complex mathematical problems, validators lock up a certain amount of ETH as collateral to ensure the security and reliability of the network.
The switch to Proof of Stake is expected to make the Ethereum network more energy-efficient, as it requires significantly less computational power than Proof of Work. Additionally, it will provide an opportunity for Ethereum holders to participate in network consensus by staking their ETH and receiving rewards in return.
As the crypto market continues to evolve, it remains to be seen whether Ether’s rise will continue or if Bitcoin will regain its dominance. However, it is clear that both cryptocurrencies will likely continue to play a critical role in the development of the digital asset ecosystem.