- Bitcoin pullsback more sharply in May compared with other cryptocurrencies, especially Ether
- Ether may provide potentially greater upside as the range of applications and use cases for the Ethereum blockchain grows
While the sharp correction in Bitcoin in May made headlines, away from the spotlight, Ether, the world’s second largest cryptocurrency by market cap remained remarkably resilient.
Ether’s resilience has now put into sharp focus whether it could one day usurp Bitcoin in market value.
As it stands, Bitcoin is currently twice as big in terms of market cap compared to Ether, a gap that narrowed to about US$350 billion in May, thanks to one of Bitcoin’s worst corrections but a far more measured pullback in Ether.
Ether proponents point to its use in a variety of applications, from decentralized finance to digital collectibles, as well as an ongoing upgrade to Ethereum that could see it move away from the energy-hungry proof-of-work mining practices that have dogged the cryptocurrency space, as factors which contributed to its resilience in the May selloff.
And that resilience has caused even Goldman Sachs (+0.51%) strategists as well as ARK Invest’s Cathie Woods to highlight Ether’s potential in recent times.
But Ether’s ascent may also be part of a secular trend as investors look beyond Bitcoin for pockets of value and potential in other cryptocurrencies.
According to data from CoinGecko, Bitcoin’s share of total cryptocurrency market value has declined to 43%, from over 70% heading into this year.
In a report last week, Goldman Sachs commodity strategists Mikhail Sprogis and Jeff Currie wrote that Bitcoin’s first-mover advantage appears “fragile,” adding there’s a high chance it will “eventually lose its crown as the dominant digital store of value to another cryptocurrency with greater practical use and technological agility.”
And while Bitcoin is down some 37% in May, Ether has fared relatively better, having shed only 11%.
Ether is also up more than 900% over the past year, compared with Bitcoin’s 275% rally.