Bitcoin is losing dominance as traders divest into riskier altcoins

By Raffaele Redi

The digital gold, BTC, is down 25% in the last 12 months

Institutional traders are increasing their exposure to altcoins, moving their capital from the lead crypto bitcoin (BTC) to other tokens like ether (ETH), solana (SOL) and cardano (ADA).

BTC market dominance was at 41.1% at the time of writing, but was over 55% one year ago, while in the last 12 months the digital gold lost 25% of its value, meaning that investors entering the market at that time and holding BTC are operating at a loss.

The trend is common to most of the altcoins as crypto winter sales are yet to be recovered, however, altcoins, in proportion, minimise these losses as their price is well above the actual BTC $43,548.35 current level, despite higher risks.

“Bitcoin is the trend driver, but once the trend is set, investors divest into riskier altcoins driving the crypto market as a whole,” said Glassnode experts.

ETH/USD price history

Date Close Change Change(%) Open High Low
Dec 3, 2022 1289.15 -6.45 -0.50% 1295.60 1305.90 1282.51
Dec 2, 2022 1295.60 18.97 1.49% 1276.63 1297.73 1265.56
Dec 1, 2022 1276.50 -17.98 -1.39% 1294.48 1300.02 1259.75
Nov 30, 2022 1294.69 78.80 6.48% 1215.89 1309.65 1212.03
Nov 29, 2022 1215.91 48.86 4.19% 1167.05 1226.68 1158.28
Nov 28, 2022 1167.04 -26.14 -2.19% 1193.18 1198.74 1150.50
Nov 27, 2022 1193.17 -11.82 -0.98% 1204.99 1222.69 1188.49
Nov 26, 2022 1205.03 6.69 0.56% 1198.34 1234.05 1195.61
Nov 25, 2022 1198.35 -4.23 -0.35% 1202.58 1205.94 1169.66
Nov 24, 2022 1202.65 19.28 1.63% 1183.37 1216.42 1179.39
Nov 23, 2022 1183.35 45.31 3.98% 1138.04 1189.36 1126.32
Nov 22, 2022 1138.11 32.43 2.93% 1105.68 1141.38 1073.75
Nov 21, 2022 1105.62 -35.14 -3.08% 1140.76 1145.01 1078.20
Nov 20, 2022 1140.64 -76.79 -6.31% 1217.43 1225.95 1131.03
Nov 19, 2022 1217.27 5.45 0.45% 1211.82 1232.54 1196.76
Nov 18, 2022 1211.92 11.79 0.98% 1200.13 1232.71 1198.39
Nov 17, 2022 1200.21 -15.57 -1.28% 1215.78 1227.61 1181.10
Nov 16, 2022 1215.76 -36.04 -2.88% 1251.80 1267.09 1185.10
Nov 15, 2022 1252.06 10.85 0.87% 1241.21 1289.18 1231.70
Nov 14, 2022 1241.22 21.60 1.77% 1219.62 1288.67 1169.14

Ethereum back at the forefront

Ethereum is coming back to the forefront with a gradually increasing market dominance at around 20%, compared to the 12.3% witnessed 12 months ago.

According to the blockchain analysis firm Glassnode, ether’s success in the market comes as “news of a successful merge on the Kiln testnet made the estimated June merge – meaning the transition to proof of stake – much more realistic”.

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“This transition, if successful, will make ethereum much more attractive to institutional investors following ESG mandates; it will also lead to a massively reduced supply as ETH will turn into a deflationary asset,” added Glassnode.

However, although ether seems to be in the investors’ spotlight, altcoins like ADA, SOL and Polkadot (DOT) seem to be involved in this transition.

“We see the potential of a sizeable crypto-wide move forthcoming since institutional demand for crypto spread to other assets in the space other than bitcoin. Last week, $193m [£148m] flowed into crypto, with bitcoin leading the way, followed by Solana, $87m, and ethereum, $10m,” said Glassnode experts.

“Looking back to the time since 2021, we can see a trend of bitcoin losing its position as the key driver behind the crypto space, especially when comparing the performance between bitcoin, ethereum, and the top 20 traded coins,” they added.

SOL/USD price history

Date Close Change Change(%) Open High Low
Dec 3, 2022 13.5026 -0.0242 -0.18% 13.5268 13.5754 13.3843
Dec 2, 2022 13.5270 0.2029 1.52% 13.3241 13.6246 13.1546
Dec 1, 2022 13.3241 -0.6433 -4.61% 13.9674 13.9945 13.2225
Nov 30, 2022 13.9675 0.8066 6.13% 13.1609 14.1190 13.0498
Nov 29, 2022 13.1608 0.0139 0.11% 13.1469 13.7512 12.9723
Nov 28, 2022 13.1467 -0.7712 -5.54% 13.9179 13.9661 12.6054
Nov 27, 2022 13.9180 -0.0516 -0.37% 13.9696 14.2416 13.8618
Nov 26, 2022 13.9697 0.1265 0.91% 13.8432 14.7386 13.7860
Nov 25, 2022 13.8431 -0.5458 -3.79% 14.3889 14.3889 13.7057
Nov 24, 2022 14.3888 0.2430 1.72% 14.1458 14.7137 13.6429
Nov 23, 2022 14.1460 1.8951 15.47% 12.2509 14.2451 12.2220
Nov 22, 2022 12.2508 0.5914 5.07% 11.6594 12.3147 10.7897
Nov 21, 2022 11.6593 -0.4290 -3.55% 12.0883 12.1008 11.1235
Nov 20, 2022 12.0898 -0.5758 -4.55% 12.6656 13.3614 11.9851
Nov 19, 2022 12.6656 -0.4174 -3.19% 13.0830 13.0886 12.4081
Nov 18, 2022 13.0842 -0.3661 -2.72% 13.4503 13.6695 12.8221
Nov 17, 2022 13.4504 -0.6199 -4.41% 14.0703 14.2914 12.7539
Nov 16, 2022 14.0700 -0.0430 -0.30% 14.1130 14.4247 13.4498
Nov 15, 2022 14.1131 0.3330 2.42% 13.7801 14.8383 13.6135
Nov 14, 2022 13.7801 0.8011 6.17% 12.9790 14.7465 11.9124

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