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No sign of a new “alt season” at Bitcoin’s expense so far as controversy over fees continues for Ethereum.
MARKETS NEWS
Bitcoin (BTC) is retaking market share from altcoins after its market capitalization dominance hit its highest since November 2021 last week.
Data from CoinMarketCap and TradingView reveals BTC briefly accounted for over 42% of the overall crypto market cap in late January.
Having suffered on the way down from its all-time price highs in November, the latest moves have allowed Bitcoin to reclaim some of its lost ground against altcoins.
Previously, attention was focused on major tokens such as Ether (ETH), Solana (SOL) and others as they capitalized on Bitcoin’s weakness.
With the tables seemingly now turning, strength is flowing back to BTC, which managed to preserve 40% dominance throughout the latter half of last month.
Bitcoin dominance 1-day candle chart. Source: TradingView
Market cap is far from a perfect measure of market strength, as it pits established tokens against those with a short history and does not take into account the work done or value behind a given cryptocurrency’s market cap.
Realized cap, which values each unspent transaction output (UTXO) based on the price at which the coins involved in the transaction last moved, is favored by analysts.
Unlike standard market cap, the realized cap has remained more or less constant since the all-time highs in November, currently sitting at $453 billion, data from on-chain analytics firm Messari confirms.
Bitcoin realized cap vs. BTC/USD chart. Source: Messari
On the topic of realized capitalization, the metric for Ether has seen a more pronounced retracement since Q4 last year.
Related: Price analysis 1/31: BTC, ETH, BNB, ADA, SOL, XRP, LUNA, DOGE, DOT, AVAX
With controversy over the Ethereum 2.0 project accompanying record-high fees, criticism over its ability to compete with Bitcoin continues to circulate.
“Ethereum isn’t a purpose built value storage and settlement network, Bitcoin is,” analyst Dylan LeClair wrote Tuesday about the fees issue.
“ETH has been becoming less efficient as a settlement network since launch as its token has accrued value.”
Data from on-chain analytics firm Glassnode showed the declining value being transferred on the Ethereum blockchain per $1 in fees versus Bitcoin.
BTC vs. ETH daily transfer volume per $1 in fees annotated chart. Source: Dylan LeClair/Twitter
Further figures added that Bitcoin fees now amount to just 1% of the fees paid for ETH transactions.
“Almost didn’t believe it when I saw it, BTC currently at ~1% of $ETH in terms of the amount people pay to use the network,” VC partner Chris Burniske, who uploaded the numbers to Twitter, commented.
BTC vs. ETH fee share chart. Source: Chris Burniske/Twitter
