The debate over Bitcoin vs. Ethereum is as old as the cryptocurrencies themselves. While enthusiasts on both sides debate the superiority of one asset over another, it is undeniable that Bitcoin retains its throne.
However, it is undeniable that Ethereum is getting closer with an improving ecosystem, constant updates, and institutional support.
Both experienced a solid recovery in August. At the time of writing, the 30-day returns for Bitcoin and Ethereum were projected to be positive at 15.84 percent and 25.95 percent, respectively.
With Bitcoin’s price consolidating, BTC dominance has also declined in recent weeks. In fact, at the time of writing, it was at its lowest level since June. So, does this imply that Ethereum is challenging Bitcoin’s dominance?
Is Ethereum going up against Bitcoin?
According to a recent Bloomberg report, “Ethereum is challenging Bitcoin’s dominance in the crypto world.” The hypothesis was based on the fact that the one-month forward contract for Ethereum was trading at an 8.37 percent premium to the spot price. Bitcoin’s one-month forward Futures contracts, on the other hand, had a premium of only 6.58 percent.
This raised the prospect of ETH enjoying greater institutional adoption and a higher level of bullishness than Bitcoin. Furthermore, Open Interest in Ethereum contracts versus Bitcoin increased from less than 0.1 in April to nearly 0.3. The recent institutional interest in Ethereum lends credence to this assertion.
While both Bitcoin and Ethereum investment products are still popular among investors, Bitcoin continues to dominate the investment product space. The same point was made in a previous article.
Nonetheless, while Ethereum’s AUM has increased by 72.8 percent to $13.8 billion since July, BTC’s AUM has increased by only 51.9 percent to $38.1 billion. Most notably, BTC lost market share, dropping to 69.6 percent of total AUM from 72.1 percent last month.
Is Bitcoin still king?
While Bitcoin remains the market leader, the rate at which Ethereum is progressing cannot be ignored. Ethereum appears to be riding the wave of its network’s adoption of the London upgrade.
In the coming months, the altcoin is expected to become deflationary. This could fuel bulls even more and attract institutional interest in the top altcoin.