It’s that time of the year again.
With all the news about regulators from China, the United States and Korea stepping up to regulate cryptocurrency trading and exchanges, bitcoin’s price has been in it’s lowest in weeks. People point to this trend as the “January dip”, the usual drop in prices across the board during January annually.
But that comparison isn’t fair – or to be precise, inaccurate. The current trends in cryptocurrency are not the same with years’ past. While back then the core supporters and buyers of crypto were hardcore libertarians and computer geeks, people who wanted to change economics, these days the buying majority are people who only discovered cryptocurrency recently, and looked to profit from trading.
But the biggest difference is the erosion of bitcoin’s dominance over the market. From dominating over 80% of the crypto market last year, BTC’s dominance is at an all time low of 35%, and it’s falling fast. It’s been the subject of debate whether Bitcoin’s falling dominance is a good thing or a bad thing, but let’s leave that topic for another day.
Coupled with BTC’s fall was Ethereum’s dramatic rise: Vitalik’s smart contract coin was just worth a dollar a year ago. Now it’s worth more than a thousand dollars, and the second most dominant crypto in the market. And its value is no overvaluation as smart contracts, fast transactions, and cheap fees that ETH offered gave rise to numerous altcoins taking advantage of the Ethereum network. 2018 was dubbed the year of the alts.
Which begs the question,
which as a tradition everybody asks every year: Can Ethereum finally overtake Bitcoin as the most valuable cryptocurrency in terms of capitalization?
The answer isn’t so simple, no matter who you ask.
If we account for factors like usefulness, value, or importance of a cryptocurrency, Ethereum certainly has Bitcoin’s number. You could argue that Bitcoin these days is only used as a store for value, and other cryptocurrencies have far surpassed it.
But you also have to consider that toppling the coin that Satoshi built has been attempted many, many times before. Despite all the hard forks Bitcoin went though, none of them have toppled Bitcoin, despite arguably being an “improved” version of Bitcoin.
It’s really hard to say if the flippening will ever happen. But rest assured, people (mostly hardcore ETH supporters) are watching silently.
The nerds and libertarian supporters know that beyond this little “war” that the goal was never the market. But rather, a revolution that would change the economic status quo for good.