Bitcoin (BTC) is carving back market share from altcoins after hitting its highest level of market value dominance since November 2021 last week.
Data from CoinMarketCap and TradingView shows that at the end of January, BTC cards accounted for more than 42% of the total market value of cryptocurrencies.
Bitcoin recovers market value
After all-time highs in November, recent moves have allowed Bitcoin to recover some of its lost gains against altcoins.
Previously, attention was focused on large coins such as Ether (ETH), Solana (SOL) and others as they exploited the weakness of Bitcoin.
Now that the tide seems to be changing, power is returning to BTC, which managed to maintain a 40% dominance in the second half of last month.
Candlestick chart of bitcoin dominance in one day. Source: Trading View
Market value is not a perfect measure of market power as it positions tokens in comparison to those with a short history and does not take into account the work done or the value behind the market value of a particular cryptocurrency.
Analysts prefer the reached maximum, which values each unused transaction output (UTXO) based on the price at which the coins involved in the transaction were moved.
In contrast to the all-time high market value, the maximum reached has remained more or less unchanged since the all-time high in November and currently stands at $453 billion, data from circuit analysis firm Messari confirms.
Bitcoin check on BTC/USD chart. Source: Messari
Ethereum fees are now eclipsing Bitcoin
In terms of realized capitalization, Ether shows a more pronounced decline from the fourth quarter of last year.
Related: Price Analysis 1/31: BTC, ETH, BNB, ADA, SOL, XRP, LUNA, DOGE, DOT, AVAX
With the controversy surrounding the record-high fee Ethereum 2.0 project, criticism continues to circulate about their ability to compete with bitcoin.
“Ethereum is not a purpose-built storage and settlement network, but Bitcoin,” analyst Dylan Leclerc wrote on Tuesday about the fee issue.
“ETH has become less efficient as a settlement network since its launch as the token has accumulated value.”
Data from chain analysis firm Glassnode showed a decrease in the value transferred on the Ethereum blockchain for every dollar of fee in relation to bitcoin.
Daily volume of BTC and ETH transfers per 1 USD in a graphic illustration. Source: Dylan Leclerc / Twitter
Other figures added that bitcoin fees are now only 1% of the fees paid for ETH transactions.
Venture capital partner Chris Berniske, who uploaded the numbers on Twitter, commented: “I didn’t even think about it when I saw that BTC is currently about 1% of ETH in terms of how much people are paying to use the network.”