Bitcoin is having a massive year, and the largest cryptocurrency by market capitalization is continuing to see major market growth as the year comes to the end.
Bitcoin recently passed all time high prices and leveled out under $28,000. However, the sheer volume of money investors are throwing into the asset also draws attention. However, the ATH prices are not the only figures catching attention. In less than one week, the size of Bitcoin’s market cap increased by more than the size of the entire Ethereum market cap.
This fact is almost startling, as it shows how much growth and attention is focused Bitcoin.
In the numbers
A quick check on CoinMarketCap shows that Bitcoin’s market cap increased from $435.5 billion to $516.1 billion in just seven days. That’s an $80.6 billion increase. Dudas’ tweet pointing out this statistic is from about 9 hours ago. The Bitcoin price and market cap continue to grow, so the actual figure is well over $80 billion in added value over the last week.
Does this increase reflect more about Bitcoin or Ethereum?
Both of the top cryptocurrencies saw increased usage and adoption, and Ethereum went through a fundamental upgrade. Besides increased institutional interest in the cryptocurrency asset class, one of the biggest factors pointing to the growth of Ethereum is the drastic increase in decentralized financial applications, or DeFi apps. In the beginning of 2020, there was less than $1 billion in total value locked (TVL) in DeFi applications. That number has topped $16 billion (although it has since dropped slightly), in less than a year.
Ethereum’s major upgrade early in December brought the network from ETH 1.0 to ETH 2.0. With the launch of ETH 2.0, the network’s verification process changed from a Proof-of-Work (PoW) to Proof-of-Stake (PoS) mechanism. Network validators will no longer need to dedicate electricity and computing power to validate the network. Now, they simply stake their Ethereum. This transition increases Ethereum transaction speed while decreasing user transaction fees: a win-win for network users.
The fundamental growth of Bitcoin leads some users to see this as a sign that Ethereum is being overlooked. Anthony Bertolino, the Brand Director for iTrust Capital, replied to Dudas’ tweet stating, “This makes me incredibly bullish for ETH given the fundamentals between the two”.
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