CoinGecko Q3 Crypto Industry Report determined that the overall market contracted by 1.0%. Bitcoin is at a three-year high as a market power, and Ethereum is retreating on several metrics.
Although some minor concerns need to be addressed, the quarter overall was positive for cryptocurrencies.
Bitcoin in the world market
The CoinGecko report discussed some interesting market trends. At first glance, Bitcoin is doing very well, with a share of over 53% of the total cryptocurrency market. Moreover, at the time of writing, Bitcoin’s dominance stands at over 58%.
This would mark Bitcoin’s highest dominance compared to other crypto assets since the April 2021 bull run.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
Bitcoin dominance in Q3. Source: CoinGecko
However, CoinGecko raised some points that don’t seem all that bullish. During this period, the market capitalization of all crypto assets decreased slightly, with even Bitcoin underperforming traditional assets such as gold and some government bonds. Since early August, UK, Japanese, and US government bonds have all outperformed Bitcoin.
World government policies, especially those of these countries, had a noticeable impact this quarter. The US interest rate cut was a particular boon for Bitcoin, as was the potential tax cut in Japan.
The announcement of economic stimulus measures in China also contributed to the revitalization of the overall cryptocurrency market. CoinGecko did not rate Chinese government bonds, but analyst Eric Balchunas pointed to the ETF’s strong performance.
“A bullish year: October total inflows into China ETFs now reach $11 billion. What a chart. $90 billion in asset purchases by the government will make that happen…” Balchunas said in a post on Monday.
China ETF performance. Source: Eric Balchunas
In short, Bitcoin has gained a significant advantage over the crypto market, but this is not a victory. The larger market is suffering and global economic policy has given this decentralized currency its biggest victory.
“While Bitcoin prices were flat in Q3, U.S. Spot Bitcoin ETFs experienced larger net inflows in Q3 compared to Q2. The resurgence in inflows led to a 13.2% increase in assets under management. ”, the report claims.
Is Ethereum overshadowed?
Ethereum (ETH) has lost some market share to Bitcoin, but that is not the only development CoinGecko has focused on. Ethereum layer 2 (L2) transactions increased by 17.2% this quarter, with nearly half of them coming from Base. This Ethereum L2 has been very successful recently and was responsible for 42% of ETH L2 transactions.
Read more: How to create tokens on the base blockchain: a no-code guide
Base has been steadily eroding Ethereum’s dominance over decentralized exchange (DEX) trading, growing while ETH is shrinking. As CoinGecko previously pointed out the technical advantages of this chain, Solana has also taken a share of ETH.
“In the third quarter of 2024, Ethereum was the dominant chain for DEX trading, but its market share is now consistently below 40%. Trading activity remained strong. Meanwhile, despite a slow quarter for the crypto market, Base continued to gain market share in the third quarter,” CoinGecko claimed.
DEX trading volume by chain. Source: CoinGecko
Finally, neither Bitcoin nor Ethereum had a completely successful quarter. Although the crypto market only slightly contracted in Q3 2024, it is still a worrying sign. Bitcoin’s successes and failures appear to be tied to a wide range of other factors, and Ethereum faces real competition.
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