Its Bitcoin Market Dominance (BTC.D) index, which measures Bitcoin’s industry capitalization to the entire cryptocurrency market, hit a new record of 47 percent on the 27th of May, the most ever since the month of October in 2021. Even though the market value of Bitcoin has dropped from $1.3 trillion at the end of November 2021 to 550 billion dollars in May, The dominance index has risen, indicating how traders feel more at ease selling altcoins. Let’s look at three reasons traders are fleeing from the market for altcoins in search of Bitcoin’s security.
The native Ethereum cryptocurrency Ether (ETH), the most popular alternative cryptocurrency in terms of market capitalization, has seen constant declines in market dominance over the past five months, ranging by 22.38 percent in December 2021 and 17.86 percent as of May 20, 2022. This decrease comes after a rise of two years, during which ETH/BTC increased by over 200 percent between September 2019 and December 2021. Ether has performed better than Bitcoin in recent times due to the excitement over the long-awaited change to its protocol, called “the Merge,” which aims to make Ethereum more flexible and affordable. However, the upgrade that aims to transform Ethereum’s blockchain from proof of work to proof-of-stake (an alternative called Beacon Chain) has been repeatedly delayed.
Martin Koppelmann, the co-founder of the Ethereum Virtual Machine (EVM)-compatible Gnosis chain, was reported to have mentioned the possibility of a seven-block restructuring on the Beacon Chain, implying that the chain “forked” briefly during its test period. The change comes after an increase of two years, during which ETH/BTC was up by over 200 percent between September 2019 and the end of December 2021.
Ether has performed better than Bitcoin in recent times because of the excitement around the long-awaited change to its protocol called “the Merge,” which is aimed at making Ethereum more flexible and affordable. The upgrade, which aims to change Ethereum’s blockchain from proof of work to proof-of-stake (an equivalent called Beacon Chain), has been delayed multiple times. Martin Koppelmann has reportedly hinted at a reorganization of seven blocks on the Beacon Chain, implying that the chain “forked” for a short time during its test period.