Ether’s dominance slips: What it means and why it is important

cnbctv18.com:

Ether's dominance, a measure of how strong a cryptocurrency is compared with all other coins in the market, hit an all-time high of 22.40 percent in December 2021. However, it's been on the decline ever since, per a report. It lost 4 percent over the last two months, and a fresh dip of 3 percent on March 6 saw the dominance of Ethereum’s native token Ether slide to 18.40 percent.

This is the second significant drop in the span of a week after ETH's dominance fell from 18.49 percent to 18.14 percent on March 4.But what exactly is market dominance and why is it important?Dominance is an important metric to understand the position of a cryptocurrency in the market with respect to its peers. It is simply the ratio between the market cap of a particular cryptocurrency and the total market cap of the entire crypto space.Also Read| US President Biden announces executive order on cryptocurrency; details hereBitcoin's market dominance was close to 100 percent in the early years of cryptocurrency. However, it started to drop significantly as new cryptocurrencies were created.

Ethereum was especially responsible for taking away Bitcoin's dominance in the market.Ethereum's market dominance shot up in 2021. Even though Ethereum is only half as old as Bitcoin, it has quickly risen to become the second-largest cryptocurrency by market cap, taking a large chunk of the market dominance in the process.Ethereum’s dominance in the market had reached a high of 22 percent on the back of multiple bull rallies in 2021. This can be attributed to the ongoing changes in the network.