Bitcoin Dominance Declines as ETH Breaks All Records
On May 2, 2021, the cryptocurrency that ranked just next to Bitcoin in terms of market capital, Ether, had broken all records and made the headlines as it overcame the target of three thousand dollars and made it to the top of the competition. It must not come as a surprise, given that Bitcoin failed to maintain its position as the dominator of the crypto market and declined in market value from 70 percent in January 2021 to 46 percent in May 2021. Meanwhile, Ether had already increased its market share to 15%, and the next competitors have together occupied 36% of the market, double their value last year.
The Return-On-Investment (ROI) of Bitcoin had risen to only 95 percent, while Ethereum’s ROI is as high as 300 percent. Furthermore, more and more projects are dealing with various aspects of Decentralized Finance, hitting a market value of a hundred billion dollars, and most of these projects operate on Ethereum’s Blockchain interface. Market analysts have also claimed that due to investors preferring to put money into more than one token, there is scope for cryptocurrency other than Bitcoin to soar and give it tough competition.
Another factor that is speculated to have caused Bitcoin’s fall from grace is Charlie Munger’s vociferous comments against its market supremacy. Munger, the vice-chairperson of Berkshire Hathaway, commented at the annual conference of the shareholders of this multinational company that he despised the success of Bitcoin, calling it “useful to kidnappers and extortionists.” Previously he had termed Bitcoin as a volatile currency in this same year at a question and answer session. The Chairperson, Warren Buffett, took a similar stand, saying that Bitcoin is an implement for gambling in the free market and delusion earlier. However, when asked in response to Charlie’s statement, he stated clearly that he would avoid the question as he did not want to incur the wrath of thousands of investors of Bitcoin who were watching him live on television.
Based on the aforementioned occurrences, it can be said that although Bitcoin has not lost its position as the leading cryptocurrency, the rising progress of other cryptocurrencies like Ethereum will make its position unstable. However, given the fact that conservative conglomerates like Berkshire Hathaway are gradually polling in favor of Bitcoin, it might still have some merit, and security, after all.
