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Tuesday, January 31, 2023

As Altcoins rally, Bitcoin’s Dominance Weakens

Bitcoin, the world’s most valuable cryptocurrency, was little changed between $60,000 and $63,000 Friday before the U.S. jobs report was released. While the price of Bitcoin is little changed over the week, altcoins and gaming tokens have seen significant gains.
Solana’s SOL token surged 21% this week, breaking through its all-time high on Thursday. Ethereum (ETH) also soared to a record on Nov. 3, hitting $4,628. The price is up 2.4% on the week.

Alternatives to ETH are still in favor, according to Daniel Kukan, a trader at Crypto Finance AG.
Matthew Dibb, COO of Stack Funds, suggests that the bitcoin dominance chart, which shows the cryptocurrency’s relative dominance over the rest of the market, indicates a bias toward altcoin exposure.
“We expect this trend to continue for the foreseeable future,” he said.

As altcoins gain in popularity, bitcoin’s dominance is decreasing.
“We have seen consistent demand for Layer 1 tokens even during periods of market weakness,” said Dibb.
Avalanche’s AVAX token hit an all-time high of $80.29 on Friday and is up 20% this week. The DOT of Polkadot has also gained significantly this week and is up 20%.
Coins related to virtual worlds, or so-called metaverses, were also in the spotlight after Facebook announced it would change its name to Meta and enter the arena.

The recent rebranding of Facebook to Meta is making the crypto market reassess the future value of these metaverse competitors, which were undervalued until last week, according to Juan Pellicer, an analyst at IntoTheBlock.
MANA, the currency of Decentraland, a global virtual world powered by the Ethereum blockchain that allows users to monetize content and applications, is up 88% on the week. SAND, the token of The Sandbox, a virtual world where players can build, own, and monetize their gaming experiences using non-fungible tokens, has gained 132%.

The number of play-to-earn tokens has also increased. The AXS token of Axie Infinity is up 5% this week. Enjin coin (ENJ), the token of Enjin, a gaming community platform and virtual goods marketplace worth $2.6 billion, is up 28%.

Enjin announced Thursday that it has established a $100 million fund to support projects in its ecosystem that aim to develop a decentralized metaverse. The fund will invest in cross-chain NFT assets, digital collectible applications, mixed reality gaming, virtual events, and building multichain infrastructure.

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