It’s almost time for the mythical merger. Ethereum’s transition from Proof-Of-Work to Proof-Of-Stake is the most talked about event in crypto at the moment, and money is flowing to that blockchain. It also led to a drop in dominance in bitcoin. That metric measures the percentage of the whole crypto market that bitcoin represents, and it’s currently “down at levels not seen since 2018.” Which makes sense. Since everyone has already placed their stakes and the merger is near.
According to Arcane Research’s The Weekly Update, “the all-time low occurred during the ICO craze in January 2018.” Which makes sense, because ICOs were the talk of the town at the moment. This impetus was eventually lost. Is it possible to expect the merger to be the same? On the one hand, this is a structural change on Ethereum as a whole, so it’s more important than ICOs ever were. The stakes are high and the merging will not go according to plan.
The Merge Isn’t The Only Factor
Before advancing, let’s explore Arcane Research’s stats:
“September has started with varying returns among our indexes. Bitcoin is currently at 1% and it has had the most difficult start to the month. All other indexes are in the positive territory, with the Large Caps gaining 1%, the Small Caps 2%, and the Mid Caps 7%.”
These last weeks have seen bitcoin gain ground for everyone, including their mothers. The Mid Caps are the most active, with Ethereum Classic being an undisputed leader. The merge is helping this almost-forgotten cryptocurrency gain ground. A whole industry is going to disappear when Ethereum moves from Proof-Of Work to Proof-Of–Stake. The new system doesn’t require miners, so all of them are exploring their options and the original Ethereum seems to be the big winner in this scenario.
However, there’s another Classic cryptocurrency that grew even more. The Weekly Update
“While the large caps’ performances have been mostly flat over the previous seven days, we see massive increases in some of the smaller coins. Terra Luna Classic surged by 222% amid plans to revive the chain, while Ethereum Classic increased by 20%.”
So, even though it’s a big factor, it’s not all about the merge. Arcane Research also offers another crucial factor.
“An essential caveat of the bitcoin dominance sitting close to an alltime low is that stablecoins are far more significant now than the last time bitcoin showed this low dominance. Excluding the USDT and USDC from the equation, we see that bitcoin still makes up half of the crypto market.”
Market Cap BTC Dominance in CryptoCap| Source: TradingView.com
Bitcoin’s dominance in the Last Months
We at NewsBTC constantly monitor bitcoin dominance so you don’t have to. You might not realize how volatile the field can be. This report was written two months agoThe following was highlighted:
“Over the last couple of days, bitcoin has watched its market dominance declined by more than 2%. Ethereum quickly took this market share and has been growing its dominance in the same time. It added more than 2% to go from straggling around $16% to its current dominance of 18.9%.”
However, last month the report’s title was “Bitcoin dominance grows as crypto risk appetite remains low.” The reason for this was:
“Arcane Research noted that the overall weakness in the sector is driven by a “natural rotation as traders seek safety in a falling market”. The increase in Bitcoin dominance has been accompanied by a rise in stablecoin total market share.”
The bitcoin dominance metric has been a rollercoaster ride and the merger approaching will add volatility. Arcane Research reports that ETH currently stands at 20.35% and BTC 38.26%.
Before we go, there’s one last factor to analyze. US CPI data for August will be released on September 13, 2013. While it has been predicted that the interest rate would rise by 75bps in August, the truth is that any thing can happen. The announcement of the merger will be made simultaneously. There are many fun times ahead.
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