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Bitcoin dominance teeters at 50% as ETH, altcoins gain traction

The cryptocurrency market could be approaching a speculative frenzy as more capital is reallocated from BTC to altcoins.

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The Bitcoin dominance index has collapsed by 20 percentage points since the start of 2021. ETH, BNB and more speculative altcoin bets have seen their dominance rise over the same period.

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Bitcoin dominance teeters at 50% as ETH, altcoins gain traction

Bitcoin (BTC) dominance briefly fell below 50% last week for the first time since January 2018, sending a strong signal that more speculative bets on altcoins were on the rise.

The Bitcoin dominance index, which measures BTC’s market capitalization relative to the broader cryptocurrency market, reached a low of 49.35% on Thursday, according to CoinMarketCap. At the beginning of 2021, BTC dominance was 70.68%.

Ethereum (ETH), meanwhile, accounted for nearly 15% of the overall market at its peak on Thursday. ETH dominance is up nearly 4 percentage points since the start of 2021.

ETH has outperformed BTC over the past seven days, charting an impressive 9.5% return. The second-largest cryptocurrency by market cap is down 10% from its previous all-time high whereas Bitcoin has corrected over 20%.

Binance Coin (BNB) has also seen its share of the overall market grow steadily this year, from 0.71% on January 1 to 4.17% on April 25. BNB is being supported by several fundamental factors, including growing adoption of the Binance platform and a coordinated burn of $600 million worth of tokens in the first quarter.

Meanwhile, cryptocurrencies outside the top ten have seen their share of the overall market inflate from less than 11% to over 18% since January 1.

Despite registering multiple record highs this year, Bitcoin’s dominance relative to altcoins has declined sharply. Source: CoinMarketCap

Commenting on the market shuffle, Meltem Demirors, the chief strategy officer of crypto investment manager CoinShares, said she is “seeing a lot of folks chasing returns by moving further out on the risk spectrum.”

1/ on thursday, bitcoin dominance fell below 50% for the first time in nearly 3 years

the last time this happened was January 2018, and that cycle last about 6 months

seeing a lot of folks chasing returns by moving further out on the risk spectrum

94 coins w/ mcap > $1B pic.twitter.com/s2BX48rqao

— Meltem Demirors (@Melt_Dem) April 25, 2021

Demirors also observed that 94 cryptocurrencies now have a market capitalization of $1 billion or more. At the time of writing, that figure had fallen to 87, according to CoinMarketCap. An additional seven projects were valued at $900 million or more.

Analysts are divided about the pace and timing of the so-called alt season, a period of the market cycle where many altcoins surge against the dollar and Bitcoin. Ben Lilly, co-founder and analyst at Jarvis Labs, told Cointelegraph last week that he doesn’t believe now is the best time to reallocate from BTC to altcoins from a risk-adjusted perspective.

Meanwhile, an analysis from Filbfilb, co-founder of the Decentrader trading suite, concluded that we are now approaching the major boom period for altcoins.

The current market cap for altcoins is $937 billion.

Source: https://cointelegraph.com/news/bitcoin-dominance-teeters-at-50-as-eth-altcoins-gain-traction

bitcoin-dominance-teeters-at-50%-as-eth,-altcoins-gain-traction

Cointelegraph

Polkadot-centric derivatives exchange raises $6.4M in seed funding

The successful private investment round highlights growing conviction in the Polkadot ecosystem.

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DTrade is planning to build the first derivatives exchange on Polkadot following a highly successful private investment round.

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Polkadot-centric derivatives exchange raises $6.4M in seed funding

Decentralized exchange dTrade is bringing derivatives trading to the Polkadot ecosystem after concluding a $6.4-million seed investment round, setting the stage for wider decentralized finance use cases on the developer network.

The private investment round was led by some of the biggest names in the blockchain venture capital world, including Three Arrows Capital and DeFiance. Polychain Capital, ParaFi Capital, Huobi, Mechanism Capital, Bixin Ventures, IOSG Ventures, Hypersphere Ventures and Fenbushi Capital also participated.

Several companies have also stepped up to support liquidity on dTrade, including Alameda Research, CMS Holdings, MGNR, Kronos and Wintermute.

Alameda Research has invested heavily in Defi this year, allocating $20 million toward Reef Finance and $4 million toward Coin98 Finance.

As a decentralized exchange, dTrade allows for the trading of perpetual swaps and options with on-chain settlement. In theory, the platform can accommodate unlimited derivatives markets without custodial and counterparty risks. The trading platform is not available to United States-based traders.

“Derivatives are on track to become the largest market in decentralized finance, similar to how they are the largest asset class in traditional finance,” said Nikodem Grzesiak, co-founder of dTrade. “Derivatives are an exciting use case of blockchain. Entirely new perpetual swaps for blockchain-based assets within Polkadot’s multi-chain architecture can be added through a simple governance proposal.”

The popularity of crypto derivatives has exploded over the past year as participants seek additional exposure to the rapidly growing market. CoinMarketCap’s 2020 annual report found that crypto derivatives accounted for 55% of the total cryptocurrency market last year.

Polkadot’s developer network has also grown rapidly, with 435 projects having launched on the platform at the time of publication.

Source: https://cointelegraph.com/news/polkadot-centric-derivatives-exchange-raises-6-4m-in-seed-funding

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Cointelegraph

Dfinity’s ICP token sees violent first day of trade on major exchanges

Following five years of development, Dfinity’s Internet Computer token is trading on major exchanges.

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Dfinity’s “Internet Computer” tokens are finally tradable after five years in the making.

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Dfinity's ICP token sees violent first day of trade on major exchanges

The launch of the Internet Computer utility token has seen a wild first day of trading after its long-awaited debut on exchanges.

The ICP token from Dfinity was listed on Coinbase Pro and several leading exchanges including Binance, Huobi Global, and OKEx on May 11.

Over four hours, prices for the newly launched token have swung from an early intraday high of $700 down to $250, before recovering 70% over 10 hours to trade for $425 at the time of writing. Coingecko estimates $1.8 billion worth of ICP tokens have traded just 14 hours since trade commenced.

ICP/USD chart, 24 hours: Coingecko

The Internet Computer is a decentralized blockchain project by the Dfinity Foundation. Dfinity describes the protocol’s mission as expanding the functionality of the public internet from a network that connects billions of people through standard protocols to a publicly accessible global supercomputer based on its own ICP protocol.

It has the lofty ambition of replacing the trillion-dollar legacy internet and IT industry by allowing developers to install their code directly on the public internet — dispensing with hosting companies, servers, commercial cloud services, and tech monopolies.

Like Ethereum, the platform would allow developers to run computing applications on decentralized infrastructure. However, Dfinity claims superior scalability over Ethereum’s Layer 1 mainnet.

While Dfinity has been focused on building this Internet Computer since 2016, much of the project’s inner workings have been shrouded in mystery due to its policy of closed-source development. The platform’s Mercury genesis launch event took place on May 7, marking the public launch of the platform after its completed mainnet initialization in December 2020.

ICP tokens can be staked into its governance system to earn “voting rewards” or be converted into “cycles” that can be used to power smart contract computation. The Internet Computer platform runs on a Network Nervous System (NNS), which is an open algorithmic governance system that oversees the network and the token economics.

The system is broken down into several subsections which include the ICP tokens in addition to “neurons” and “canisters” which govern the network autonomously and are explained in much more detail on the Dfinity blog.

The project started fundraising before the 2017 ICO boom under the DFN ticker but has since rebranded to ICP.

Source: https://cointelegraph.com/news/dfinity-s-icp-token-sees-violent-first-day-of-trade-on-major-exchanges

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Cointelegraph

Binance CEO says volatility ‘is not unique to crypto’: Data shows it’s Bitcoin’s jet fuel

Binance CEO Changpeng Zhao said Bitcoin’s volatility is “probably less volatile” in comparison to some stocks, but data shows Bitcoin is the incontestable winner when adjusting the metric based on returns.

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During an interview with Bloomberg TV on May 3, Binance CEO Changpeng Zhao suggested that Bitcoin (BTC) “is probably less volatile” than the stock prices of Apple (AAPL) and Tesla (TSLA).

Zhao argued that crypto’s volatility was not unlike the stock market, adding: that “volatility is everywhere” and that “it is not unique to crypto.”

However, those involved in cryptocurrency trading probably know that cryptocurrency prices fluctuate a lot more than listed trillion-dollar companies. This begs one to question whether or not Zhao is detecting a trend that some may have missed?

60-day historical volatility, BTC vs. stocks. Source: Cointelegraph

The first obvious reading from the chart above is that both Bitcoin and Tesla share different volatility levels when compared to trillion-dollar stocks like Apple and Amazon.

Moreover, stocks seem to have experienced a 60-day volatility peak in November 2020, while Bitcoin was relatively calm.

Tesla is an exception rather than the norm

Another thing to consider is that Tesla’s market capitalization is $633 billion, and it has yet to post a quarterly net income above $500 million. Meanwhile, every single top-20 global company is incredibly profitable. These include Microsoft (MSFT), Google (GOOG), Facebook (FB), Saudi Aramco (ARAMCO.AB), Alibaba (BABA), and TSM Semiconductor (TSM).

The 12 most volatile $200 billion market cap stocks. Source: Investing.com

The list above shows the top-12 and bottom-12 most volatile stocks to show how Tesla’s (TSLA) price swings are far off the average of other $200 billion market cap companies. The volatility seen in cryptocurrencies has been the norm, given that there is a lack of earnings, a very early adoption-stage cycle, and a lack of an established valuation model.

One doesn’t need to be an expert in statistics to ascertain that the S&P 500 index performance has been pretty much stable over the past year, apart from a couple of weeks back in September and October 2020.

12-month S&P 500 performance, 5-day chart. Source: TradingView

Zhao may be the founder of the leading crypto exchange, but he doesn’t personally trade. On the contrary, he actually recommends holding (HODL) instead of trading in every instance possible.

Lol, I don’t do leverage or loans. I don’t even trade. I just hodl #bnb.

— CZ Binance (@cz_binance) January 12, 2021

If you feel stressed out during every dip, you probably should not trade much, or at least change your trading strategy. Maybe just #HODL?

Not the best advice for our business (trading fees), but probably good advice for many new “traders”.

Not financial advice.

— CZ Binance (@cz_binance) April 22, 2021Volatility does not measure returns

Exclusively analyzing volatility presents another big problem. The indicator leaves out the most important metric for investors, the return. Whether an asset is more or less volatile doesn’t matter if, on average, one asset consistently posts higher gains than others.

MicroStrategy has listed almost every currency, stock index, and S&P 500 index component, and curious analysts can compare returns and the sharpe ratio side-by-side with Bitcoin’s.

As explained in the footnotes:

“The Sharpe ratio is a measure of risk-adjusted (really volatility-adjusted) returns. It is a way to measure how much return an investment generated for the risk (volatility) endured over some time horizon.”Bitcoin return and sharpe ratio vs. major assets and indexes. Source: Microstrategy

As the data clearly states, Bitcoin is the winner on risk-return metrics against every major asset and index over the past 12 months. A similar outcome also takes place when using a 5-year timeframe.

Therefore, Zhao may have simply incorrectly stated that Bitcoin’s volatility is similar to the stock of trillion-dollar companies. However, when adjusting the metric based on returns, it is the incontestable winner.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

The first obvious reading from the chart above is that both Bitcoin and Tesla share different volatility levels when compared to trillion-dollar stocks like Apple and Amazon.

Source: https://cointelegraph.com/news/binance-ceo-says-volatility-is-not-unique-to-crypto-data-shows-it-s-bitcoin-s-jet-fuel

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