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Research: ETH hit peak dominance against BTC going into the Merge Research: ETH hit peak dominance against BTC going into the Merge

Research: ETH hit peak dominance against BTC going into the Merge

Ethereum dominance over Bitcoin has been increasing since July 2021, and it reached its peak as the merge closes in.

Research: ETH hit peak dominance against BTC going into the Merge

Cover art/illustration via CryptoSlate

Ethereum‘s dominance over Bitcoin has been increasing since July 2021, and the Merge occurred at peak dominance over the flagship crypto.

The chart below compares Bitcoin and Ethereum’s market caps against one another to determine which is dominant, starting from 2016. The black areas indicate the BTC/ETH dominance.

When it exceeds the pink line, it indicates that Ethereum is at its peak, outperforming Bitcoin. If it goes over the green one, it means the opposite.

BTC-ETH Dominance
BTC-ETH Dominance (via Glassnode)

Bitcoin maintained its dominance over Ethereum throughout 2016. However, Ethereum’s bull run in 2017 allowed it to claim market dominance. Even though Bitcoin was able to reclaim dominance for a short while in early 2018, it quickly lost it to Ethereum again.

Bitcoin came out strong in the second half of 2018 and held dominance over Ethereum for three years. This time frame also includes the 2018-2021 bear market and demonstrates that Bitcoin didn’t lose its dominance over Ethereum then.

However, Ethereum’s dominance started to increase in July 2021. As of the end of July 2022, it exceeded the pink line, indicating that Ethereum reached its peak dominance the Merge approached.

Best Performing Ethereum

Ethereum: Monthly Returns
Ethereum: Monthly Returns (Source: Glassnode)

The above chart shows Ethereum’s monthly returns since the beginning of 2022. It reflects the findings of the first chart and indicates that Ethereum’s best performance of the year was recorded between July and August.

These months saw historically high returns that exceeded over 70% and clawed back the losses after the LUNA collapse.

However, the real question remains if Bitcoin will start to outperform again as we head into a global recession and Ethereum loses the narrative of the Merge. Or will Ethereum be able to maintain its dominance over Bitcoin?

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