Another disappointment drives Bitcoin to gain crypto market share during the slump.

Oct 10
As investors seek safety in the most frequently held digital asset as the cryptocurrency's recent price collapse intensifies, Ether is outperforming market leader Bitcoin.

The market value of the second-largest digital currency has decreased by around 18% since June, but Bitcoin has decreased by nearly half that amount during the same time frame. Ethereum dropped 5.4% to $1,639 on Monday, while Bitcoin dropped 2.3% to $27,290.
According to data gathered by CoinMarketCap, this has helped lower Ether's proportion of the overall $1 trillion cryptocurrency market value to 17.8% from roughly 18.4% at the start of the year. In the meantime, Bitcoin's market share rose from 40% to 50.3%.
Since activity and fees on the network have fallen and the coin's supply has started to rise again after months of deflation, worries about Ethereum's development and prospects have grown.

The Ethereum network is also experiencing an increase in centralization anxiety. Many cryptocurrency investors are being forced to move to Bitcoin, which has a strong history of outperforming weak markets, due to recent unrest in the Middle East and the potential for additional interest rate hikes.

Overall this year, Bitcoin has increased by 66% compared to Ethereum's 32% increase. Looking at data after September 15, 2022, when Ethereum underwent a network upgrade known as the "Merger" that terrified investors for months, the contrast is even more startling.

According to a report from CoinMarketCap, "In fact, ETH has significantly underperformed the broader market since the merger, with the ETH/BTC price/volume ratio trending downward over the past year." Since traders have historically turned to Bitcoin during down markets, Ethereum's underperformance is probably caused by the bad market's continuing effects.

According to data trackers Etherscan and Arkham Intelligence, the Ethereum Foundation, which works to promote the ecosystem of the network, sold around $2.7 million worth of ether and converted it into the USDC stablecoin on Monday, adding to the pressure.

Exchange-traded funds for Ether that are based on futures have failed to draw a sizable volume of investors and expand the cryptocurrency markets since they started trading on US marketplaces last week. According to James Seyffart, a Bloomberg Intelligence analyst, "It's possible that the introduction of Ethereum futures ETFs may have caused Ethereum to become overbought by investors or traders, and these launches were fairly routine and unimpressive."

The advantage Bitcoin has over competing coins has enhanced its "long-standing claim to provide a safe harbor, or at least a diversification benefit, for investments in traditional markets," according to Caroline Mauron, co-founder of digital asset derivatives liquidity provider OrBit Markets.

Now that Sam Bankman-Fried is on trial in the US for the failure of the FTX exchange, cryptocurrency faces the threat of an extended period of high borrowing costs as well as a sharp reminder of the hazards to the sector.

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