Ether_ Dogecoin gains see Bitcoin s share of crypto market fall
Parabolic jumps in digital tokens such as Ether_ Dogecoin and Binance Coin are outshining Bitcoin_ prompting more questions about whether that segment of the cryptocurrency sector is ripe for a reckoning.
The rallies have contributed to a slump in Bitcoin s share of the 2.6 trillion US Dollar crypto market to 43% from about 70% at the start of 2021_ a metric that for strategists at JPMorgan Chase & Co. and DataTrek Research LLC may be a warning sign of investor excess in a range of digital tokens.
Bitcoin s waning dominance carries echoes of froth to the extent it s being fueled by a rally in other cryptocurrencies driven more by retail demand_ a JPMorgan team led by Nikolaos Panigirtzoglou wrote in a note Friday. DataTrek s co-founder Nicholas Colas has indicated that history suggests tokens outside Bitcoin can drop pretty quickly when Bitcoin s share hits 40%.
Plenty of commentators have been fretting for some time that a stimulus-fueled peak is at hand in cryptocurrencies only to see them rally even more. But the worry is hard to shake in a sector that defies traditional investment analysis.
The share of the largest cryptocurrency could be declining because investors are getting more comfortable with a wider array of tokens. Alternatively_ retail traders may be chasing quick_ speculative gains.
'Even if you don t invest in the space_ this is worth tracking_' DataTrek s Colas wrote in a recent note. He added that with more than $2 trillion now invested in virtual currencies_ 'a meaningful reset lower could also affect more traditional financial assets like equities.'
For the JPMorgan team_ the possible retail-driven froth in cryptocurrencies is a reminder of late 2017_ when a crypto boom peaked.
Ether Record
Among the most notable moves in the crypto market Monday was Ether s jump past $4_000 for the first time after a climb of more than 2_000% in the past year. The JPMorgan team said an analysis of activity on the affiliated Ethereum blockchain suggests a lower fair value of $1_000 for the token.
Dogecoin which started as a joke in 2013 but is now a dominating Internet meme and sitting on a 20_000% advance in the past year captured the headlines over the weekend.
First off_ billionaire Elon Musk cited the token again_ this time in a much-touted television appearance on the U.S. show Saturday Night Live. Later_ it emerged that the cryptocurrency is apparently being used to pay for a lunar satellite launch with SpaceX_ Musk s commercial rocket firm.
Dogecoin Used to Pay for Lunar Satellite Mission With SpaceX
Bitcoin was up 1.7% Monday at about $58_887 as of 8:30 a.m. in London. The largest cryptocurrency remains some way shy of April s record of $64_870 after a pullback.