As always in troubled times, markets turn to less risky assets, and in the crypto world this still means Bitcoin and Ethereum ?
Bitcoin dominance (its market cap share within the whole crypto market) has been on the rise these days, growing from last week’s 42% to 45.2%.
First losing the >90% zone in 2017 facing a rising concurrence from Ethereum, Bitcoin dominance fell as low as 35% after the January 2018’ crash. It has been accumulating for the next three years to reach 74% in January 2021… but even the crazy bull run from $30k to over $60k could not keep the dominance level in face of the emerging cryptos like Solana, Cardano, Terra…
The “Ethereum killers”, as these PoS-based smart contract platforms are generally known, have seen major capital influx from VC funds in 2021, which allowed them to develop ecosystems that “justified” these blockchains and subsequently pushed their cryptocurrencies’ prices up. Wallets, games, NFT collections, other types of DApps… if the incentives are correct, why not indeed develop on this or that blockchain?
The problem is that any blockchain needs to weather a number of real-life troubles before one can assume it is working correctly. We have all seen that Terra imploded spectacularly, Solana is regularly clogged, and Cardano… is there any real development on Cardano at all after all these years? ?
The fact is that despite such an impressive capital injection, most DeFi and NFT activity still happens on Ethereum, which is performing much better than its “killers”, still at the same 19% market cap dominance since May’21.
The Lindy effect stipulates that the future life expectancy of non-perishable things – like technologies – is proportional to their current age. This means the longer a technology has survived, the more it is likely to continue living.
So far Bitcoin has proven to be the best cryptocurrency, and Ethereum – the best smart contract platform, and as time passes, they become even more so.
Will other blockchains be able to withstand the test of time?