For the first time in four years, Bitcoin loses its market dominance. In the cryptocurrency market, Bitcoin has always been popular. Many traders use the coin to set trading strategies and boost portfolios. However, 2022 has not been the same for Bitcoin. The surge began in May following the collapse of Terra. From $61000, Bitcoin now sits at a market price of $18000. The crypto coin is becoming less popular this season.
Bitcoin’s Dominance is now at 36.78%, the lowest it has been since 2018. Even though it is still leading, its popularity in cryptocurrency is at a new low. The two main reasons for the decline in Bitcoin Dominance are the Ethereum Merge and the Cardano Vasil Hard Fork Upgrade. Other factors include the persistent bear market, changing market trends, new DeFi Narratives, and stablecoins.
Ethereum Market Dominance and Popularity
Ethereum is scheduled for an upgrade called the “Ethereum Merge” on 15 September 2022. The upgrade is an exceptional occurrence that makes the crypto coin more popular. Due to the high transactional fees, Ethereum is migrating from the traditional Proof-of-Work (PoW) to Proof-of-Stake (PoS). This will lower transaction costs and increase efficiency.
There is also the eco-friendly aspect. Bitcoin and Ethereum mining consumes a lot of energy. By moving to PoS, Ethereum will be environmentally friendly. No doubt, Ethereum is popular, too, because of energy consumption. The world is looking for eco-friendly solutions to reduce the existing pollution; if Ethereum can offer that, why not choose it over Bitcoin?
Many cryptocurrency firms are in full support of the Ethereum Merge. The whole process is historical in the cryptocurrency community because it is a first of its kind. Bitcoin Maxis said it was impossible, and many people thought so too. However, Vitalik Buterin keeps proving people wrong. The ability of Ethereum to move from PoW to PoS when many people deem it impossible is mind-blowing.
The popularity of Cardano: The Vasil Hard Fork Upgrade
Cardano, popularly known as $ADA, is also having an upgrade this month. The Vasil Hard Fork Upgrade is scheduled for 22 September, a few days after the Ethereum Merge. Even the CEO, Charles Hoskinson, admits that it was one of the toughest upgrades Cardano has ever done.
Hard Fork: Upgrading the blockchain network, including nodes, blocks, and transactions. The new network becomes utterly different from the old one. It no longer accepts old blockchain transactions.
Vasil Hard Fork: It is a part of ADA’s third development cycle meant to lower transaction costs and improve network capacity.
Advantages of Cardano’s Vasil Hard Fork:
- Improve Web3 for developers and Dapp creation.
- Upgrade Plutus, ADA’s smart contract development platform.
- Lower transaction costs.
- To help ADA expand as Ethereum’s Competitor.
The chosen date is also the independence day of Bulgaria, one of the oldest countries in Europe. The fork is named Vasil St. Dabov, the late Bulgarian community member. Vasil was a blockchain advisor.
Will Bitcoin Regain Market Dominance and Popularity?
Bitcoin whales are moving the coins around. Recently, someone moved 15000 Bitcoins in a wallet for nearly eight years. According to CryptoQuant, the whale is a retired miner. Mt. Gox also dumped recovered Bitcoin into the market. The whales are only moving BTC, not liquidating. Therefore, Bitcoin might regain popularity. Another reason is that Bitcoin Maxis still exist, and the popularity of Bitcoin depends on its scarcity.
Closing Thoughts
Altcoins movement affects the price of Bitcoin. Bitcoin is the glue of the cryptocurrency space. If altcoins like Ethereum increase in price, Bitcoin increases in price too. It is a trend that is difficult to break. For example, the Ethereum gain in the past 24 hours has made Bitcoin rise from $18000 to $19000 at the time of this article. The cryptocurrency markets are unpredictable, and only time will tell.
