Ether hits $3,000 as Bitcoin’s dominance declines

Proponents say investors are getting more comfortable with a variety of cryptocurrencies

An upgrade of the Ethereum blockchain as well as the network’s popularity for financial services and cryptocollectibles are among factors cited for Ether's rally. Getty Images

Bitcoin’s domination of the total cryptocurrency market value is declining, suggesting room for more than one winner among digital tokens as the sector evolves.

The largest digital currency now accounts for about 46 per cent of the total crypto market value of $2.3 trillion, down from roughly 70 per cent at the start of the year, according to tracker CoinGecko. Second-ranked Ether is up to 15 per cent and a group of others outside the top few has doubled its share over the same period to 36 per cent.

Bitcoin remains the biggest cryptocurrency but the momentum in other tokens is drawing increasing interest, such as Ether, which breached $3,000 for the first time on Monday after quadrupling this year.

Crypto proponents argue investors are getting more comfortable with a variety of tokens, while critics contend the sector may be in the grip of a stimulus-fuelled mania.

“Ethereum is rising and not much seems to be in its way,” Edward Moya, a senior market analyst at Oanda, wrote in a note on Friday, adding that other tokens were also seeing “fresh interest”.

The current distribution of market share also reflects an April shake-out in the cryptocurrency sector. Bitcoin has yet to recover all the ground it lost after tumbling from a mid-April record of almost $64,870. As of 9.30am UAE time on Monday, Bitcoin was trading 1.75 per cent higher at $57,964.07 and Ethereum was up 6.26 per cent at $3,095.73.

Last month’s listing of crypto exchange Coinbase Global in the US is the latest sign of how more investors are embracing the sector despite risks from high levels of volatility and expanding regulatory scrutiny.

Ether is currently occupying the limelight. An upgrade of the affiliated Ethereum blockchain as well as the network’s popularity for financial services and cryptocollectibles are among the factors cited for the rally.

Evercore ISI strategist Rich Ross has set a target of $3,900 for the token.

Other cryptocurrencies, often referred to as “altcoins”, have jumped, too. The price of Binance Coin is up 3,490 per cent over the past 12 months, according to CoinGecko. Dogecoin, a token started as a joke in 2013 but now a social media favourite touted by the likes of Elon Musk, has surged 15,000 per cent to a market value of around $50 billion.