After its market dominance reached its highest level since November 2021, Bitcoin (BTC), is now retaking market share.
Data from CoinMarketCap and TradingView shows that BTC briefly accounted to over 42% of crypto market capital in January.
Bitcoin claws back market cap presence
Bitcoin has suffered from its November all-time highs, but the latest moves have allowed it to regain some of its ground against altcoins.
Prior to Bitcoin’s failure, the attention of investors was centered on major tokens like Ether (ETH), Solana(SOL), and others.
The tables are turning and strength is flowing back towards BTC. It managed to maintain 40% dominance in the second half of the month.
Bitcoin dominance 1-day candle chart. Source: TradingView
Market cap is not a good measure of market strength. It pits established tokens against newer ones, and doesn’t take into account the value or work behind any given cryptocurrency’s market capital.
Analysts favor realized cap (UTXO), which is the value of each unspent transaction output and is based on the last price at which the transactions were completed.
The realized cap is different from standard market cap. It has been more or less constant than the November all-time highs of $453 billion. Messari data confirms this.
Bitcoin realized cap vs. BTC/USD chart. Source: Messari
BTC fees are now dwarfed by Ethereum fees
Concerning realized capitalization, the Ethereum metric has experienced a stronger retracement than Q4 last year.
Similar: Price analysis 1/31 – BTC, ETH and BNB: ADA, SOL. XRP, LUNA. DOGE. DOT. AVAX
With record-breaking fees associated with the ETH 2.0 project, there is still much controversy about its ability to rival Bitcoin.
Analyst Dylan LeClair said Tuesday that Ethereum is not a purpose-built value storage and settlement network like Bitcoin.
Since its launch, ETH has become less efficient as a settlement platform as its token has gained value.”
Glassnode, an on-chain analytics company, showed that Ethereum’s value per $1 spent on fees was declining relative to BTC.
BTC vs. ETH daily volume per $1 of fees annotated chart. Source: Dylan LeClair/Twitter
Additional figures show that Bitcoin fees are now only 1% of the fees for ETH transactions.
Chris Burniske, a VC partner, posted the numbers to Twitter. He commented, “Almost didn’t believe it when he saw it. BTC currently at 1%of $ETH in terms the amount people pay for the network.”
BTC vs. ETH share chart. Source: Chris Burniske/Twitter