Ethereum: The price trend and its market cap

Thanks to the rising price, until a few days ago Ethereum’s market cap was back above $200 billion.

The price trend of Ethereum and its market cap.

At the end of December last year, Ethereum price was around $1,200. This was not the 2022 annual low, however, because this was touched in June below $1,000, and it has never fallen below that threshold since.

Starting on January 4, 2023, however, the price of ETH began to rise, although it did not rise above $1,300 until January 9.

On January 14 it had also already risen above $1,500, and on the 21st it climbed above $1,600.

So it has now been effectively hovering around this threshold for three weeks, with only one very brief spike above $1,700 on Feb. 2, and a low of $1,530 on Jan. 25.

Ethereum’s market capitalization

Since market capitalization is a purely theoretical figure obtained by multiplying the price of an ETH by the number of ETHs in circulation, its trend closely replicates that of the price.

In this case, however, the threshold to watch is precisely that of $200 billion.

The first time it reached that figure in its entire history was in February 2021, which was two months after the last major bull run began.

It should be noted that before the bull run began, i.e., in November 2020, Ethereum capitalized about $50 billion, or a quarter of its current capitalization.

However, as early as May 2021 it was close to $500 billion, while the all-time high was reached on November 10 of that year at over $570 billion.

Ethereum capitalization today

So today’s market capitalization is two and a half times less than it was in May 2021, and almost three times less than its peak in November of the same year.

Indeed, looking at the curve from December 2020 to the present, it looks as if, outside the bubble, Ethereum’s market capitalization has hovered right around the $100 billion mark.

In other words, the bear market of 2022 has failed to bring it back to pre-bubble levels, and indeed after falling to $120 billion in June, it has returned to the usual levels of the past two-plus years net of the bubble itself.

It is as if from December 2020 to February 2021 it rose from $50 billion to $200 billion, only to be inflated by the bubble to $570 billion and always back to $200 billion with its burst during the bear market of 2022.

In short, an ascent to 570 billion followed by a descent to 120 billion, and then always settling back to the usual threshold of recent years net of the bubble.

Ethereum’s dominance

Analyzing the dominance curve over the same period reveals that Ethereum’s market cap has moved in much the same way as the crypto markets as a whole.

In November 2020, Ethereum’s dominance was at about 11 percent, while Bitcoin’s was at 64 percent. Ethereum has risen slightly, to 18 percent, while Bitcoin has collapsed to 40 percent.

It should also be mentioned that Ethereum’s rise from 11% to 18% all happened in the early months of 2021, that is, from December 2020 to May 2021, after which it did nothing but hover around 18% for almost two years. Since December 2020 it has never returned to 11%, with a low peak at 14% in June 2022.

Bitcoin also fell to 40% in May 2021 and has since peaked at a high of 46% and a low of 35%.

So the first five months of 2021 saw a repositioning of BTC and ETH within the crypto market, which has subsequently held up to the present.

ETH’s rise was not particularly significant, as its dominance had even exceeded 30 percent for a brief moment in the past, while Bitcoin’s descent in dominance was decidedly more significant, due perhaps in part to the significant increase in stablecoin market capitalization.

Although BTC’s dominance had also fallen to 33 percent in the past, the fact that it has now seemed to have stabilized around 40 percent for almost two years gives a good idea of the change that has taken place in crypto markets in 2021.