Behind Ethereum’s Growing Market Cap Dominance

By  //  July 20, 2023

It is no surprise to anyone that Bitcoin is the biggest name in the industry. But right next to it comes Ethereum, which has already created a significant gap between itself and the next network on the list.

The most intriguing part is that the difference keeps growing.

While Ethereum has been a crypto powerhouse for a while now, people are puzzled by the fact that the platform isn’t hitting a plateau but keeps growing. For all those who want to know more about this, here are a few factors that may unravel a secret behind Ethereum’s growing market cap dominance. 

It’s the biggest platform on the market

There are so many developers working on the Ethereum platform. The number of developers on Ethereum surpasses the number on the next three platforms combined. Since it overtook Altcoin, it would be fair to say that Bitcoin is its only valid rival. 

While Bitcoin is the industry’s flagship, comparing it to any other crypto network would be unfair. Well, it’s also quickly starting to feel this way with Ethereum as well, since the gap between Ethereum and the next biggest network seems near-impossible to breach. 

While the market cap of Bitcoin is $590 billion, the cap of Ethereum is $223 billion, which is almost three times as much as that of Tether at $83 billion. While the difference between Bitcoin and Ethereum is huge, it’s not as big as at other historical points. This, too, is worth keeping in mind.

A drastic increase in Ethereum’s utility

The adoption of Ethereum is constantly growing. With more and more retailers accepting Ethereum, it’s clear that there’s serious e-commerce potential behind its tokens. Then, there are tech companies, especially those involved in software development, which find that this platform offers great fundraising opportunities.

Ethereum even has utility in space exploration and may help create decentralized and automated spacecraft navigation and communication. This is more important than ever on the eve of the ‘Dark Universe” mission launch.

For charities like that, you can use Ethereum to donate from across the globe, make instant transfers, and even pay minimal fees. People behind these organizations believe that this will persuade more individuals to open up to donate.

Even in the online casino industry, more and more sites are accepting crypto payments, as seen in the Ethereum gambling guide on InsideBitcoins. Since this is a multiple-billion dollar industry and these Ethereum casinos are growing at an unprecedented pace, this could lead to a huge increase in Ethereum’s market cap dominance. 

More validators than any other platform

The system’s reliability is another huge factor to consider, and Ethereum has over 700,000 validators, working day and night to ensure that everything runs as intended. Competitors have merely a fraction of this number, meaning these platforms are less reliable.

In Ethereum 2.0, this evolved even further. The consensus mechanism evolved from proof-of-work (PoW) to proof-of-stake (PoS). In other words, the validators are chosen based on the cryptocurrency they hold and the amount they’re willing to stake as collateral. This way, the validators are seen as more credible, other than just being the most numerous. The quantity was already there; now, the quantity catches up, as well.

Since they have the collateral on the Ethereum network, there’s a way for the network to penalize malicious validators. This keeps them in check and further enhances the integrity of the validation process.

This is just one of the factors keeping Ethereum ahead of its competitors (both in the eyes of its users and from a strictly technical standpoint). Keeping the integrity of the blockchain intact is the number-one priority, and this is the way to get there.  

The NFT market is still Ethereum-dominated

Early adoption is why Ethereum is still the leader in NFTs. Sure, other platforms have lower fees and faster transactions. Still, the fact is that a lot of people already use Ethereum, and moving to a different platform would be too expensive or inconvenient. 

This means that despite higher fees than some of its closest competitors, Ethereum is still ahead of Polygon and Solana. This advantage might not keep growing indefinitely, but for now, Ethereum’s competitive advantage doesn’t seem like it will get shaken anytime soon.

Speaking of early adoption, we can’t just gloss over that NFTs were born on Ethereum. Therefore, this network started with a sizable head start. 

Final thoughts

Unlike fiat, cryptocurrencies must stay relevant by staying ahead in utility and technology. It seems that Ethereum and its blockchain are doing a much better job at this than the majority of its competitors. In some fields, like the NFT, it was the first; in others, it does the best job (provides the most reliable platform).