Despite the recent flow of significant capital into spot Bitcoin ETFs, the expected positive impact on Bitcoin’s price has not materialized. Contrarily, Ethereum has experienced a nearly 8% increase in value while struggling to maintain the $2,600 level. This rise in Ethereum’s market dominance against Bitcoin is backed by data from on-chain analytics firm Santiment, which highlights a notable increase of over 22.4% in Ethereum’s market dominance over the past week.
The surge in Ethereum’s market dominance can be attributed to the network’s growing popularity. On a daily basis, an average of 89.4k new Ethereum addresses were generated, indicating a rising interest in the network. Furthermore, on January 16th alone, 96.3k wallets were created, highlighting the increasing appeal of Ethereum. The planned network upgrades, particularly the Dencun hard fork, have also contributed to the bullish sentiment among investors.
QCP Capital’s recent analysis reveals that Bitcoin forwards have experienced a deeper plunge compared to Ether forwards. The 1-month forward rate for Bitcoin dropped by 23%, while Ether witnessed a reduction of 16%. Despite the decrease in yields, ETH forwards still present an attractive option with annual yields of 11-13%. Selling ETH 1m 2200 Puts also proves to be a decent play with yields exceeding 21% annually. Investors anticipate potential ETH spot ETF approvals as an opportunity for further growth.
In the near future, two significant events may impact the market. The Bitcoin halving, scheduled for mid-April, and the potential approval of spot Ethereum ETFs starting in May could contribute to market direction. Additionally, broader macroeconomic factors may also influence the trajectory of the market during this interim period.
A consistent decline in the supply of Ether on crypto exchanges has been observed recently. Over the past ten days, the supply has decreased from 8.18% to 8.10%, nearing an all-time low of 8.05%. This trend indicates that Ethereum holders are moving their assets from exchanges to long-term storage in anticipation of a potential price increase.
The market dominance of Ethereum over Bitcoin continues to surge, supported by factors such as its increasing popularity, upcoming network upgrades, and appealing forward rates. While Bitcoin ETFs have failed to generate the expected positive influence on Bitcoin’s price, Ethereum remains a promising investment option. As the market awaits the Bitcoin halving and potential ETH spot ETF approvals, the evolving macroeconomic landscape may further shape the direction of the cryptocurrency market.