Another brutal week passes with the Bitcoin price still stagnant around $10k. The digital asset has been losing dominance in the market, something which was observed in the previous bull-cycle as well. Does this mean BTC was on-track to shoot to the moon?
Of dominance and hype
In 2017, BTC was losing market dominance as the Initial coin offerings [ICO] craze took over the market. According to a report by Glassnode, money entered high-yield ICOs at a much faster rate than BTC. In the early days, Bitcoin dominance had remained above 98%, and as the space evolved with the release of other alts like Litecoin, XRP, Ethereum, etc. the dominance adjusted to 95% in 2016.
However, within a few months, BTC dominance suffered a huge hit. It fell from a peak of 95% in February 2017 to a low of 37% by January 2018 as altcoins or the first alt-season was witnessed, reaping tremendous gains and also scamming people. Nevertheless, BTC regained dominance in the market and de-risked into a more reputable asset.
Fast forwards to 2020, the ICO craze was replaced by decentralized finance [DeFi] and the traders like in 2017, were actively investing in DeFi tokens. However, the question remained whether traders will move their yields from DeFi to Bitcoin?
Stacking Sats or Wei?
Ethereum has also evolved and grabbed the attention of investors in 2020. The investors appeared to lean on ETH more than they did before, and thus, it could be fair to assume that the DeFi profits could be moved into Ethereum and not Bitcoin.
As the ecosystems and communities of Bitcoin and Ethereum evolve, Bitcoin may be able to take over the investments from traditional hedge funds, as it has been seen as constant growth in investment coming from institutions. Whereas, Ethereum which has been finding its use in DeFi protocols, could be the beneficiary of the interest flowing from the Defi community.
The post appeared first on AMBCrypto
