Bitcoin surged to 63,000, up 4.5% over the last 24 hours, after the Federal Reserve’s latest 50-basis-point rate cut. According to a report by IntoTheBlock, the surge seemed insignificant as market sentiment remains somewhat divided, with many skeptical about the sustainability of this rally.
Meanwhile, Ethereum extended its underperformance to a 40-month low against Bitcoin. That reflects investor preference for BTC over Ethereum, as Bitcoin ETFs have seen major inflows while Ether ETFs have net outflows. To many traders, this is associated with the perception of Bitcoin as a stable investment, while Ethereum is high-risk and high-reward.
The report shows that Bitcoin’s dominance has grown and now makes up 73% of total capitalization combined with Ethereum and stablecoins. Year-to-date, Bitcoin dominance has jumped 6%, while the ETH/BTC ratio slips below 0.04, which is the lowest since April 2021.
However, Ethereum demand appears to weaken as investors slowly shift their attention to Bitcoin. In the year 2024 so far, Bitcoin surged about 43%, against an ETH rise of only 0.2%.
Stablecoins Gain Market Share, Affecting Bitcoin and Ethereum
Stablecoins also greatly reshaped the market dynamics. Combined, their market capitalization grew from 7% all the way up to 10%, at the considerable expense of Ethereum, actually. USDT, the leading stablecoin, hit record in market capitalization at $118 billion and led that growth.
USDC, the second-largest stablecoin, also increased its market capitalization from $24 billion to $35 billion year-to-date. This is impressive, even in a relatively flat market, and amongst other signals, it may mean that this proliferation of stablecoins has come to represent an emergence in investor confidence in blockchain-based assets and perhaps a critical link between traditional finance and cryptocurrency.
As far as Ethereum goes, the numbers are telling a different story. It is only 63% in profit to the ETH holders-which is the lowest so far this year; 82% of the total ETH volume acquired still remains profitable and highlights key investors’ resilience.
While stablecoins actually are highly reliant on Ethereum’s infrastructure, with over 60% of DeFi assets locked on the network. Despite each of these challenges that Ethereum faces, it still holds the most substantial user base out there and an active developer community in space, thereby tying its importance to the crypto world.
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