The price of bitcoin fell from over $35.000 per bitcoin last night to less than $33.000, down currently nearly 10% over the past 24 hours, following the selling of more than $100 billion of the market valuation of the world’s largest cryptocurrency a week ago.
The downturn of Bitcoin has pulled other top 10 cryptocurrencies, with ethereum, Ripple’s XRP, litecoin and cardano going down 5% to 10%—although polkadot, which is rival to the second largest cryptocurrent ethereum, has managed to keep on its recent gains.
A remarkable 450% since August, Polkadot’s dot token has gained ground as the interest in Decentralized Foreign Relations (DeFi) grows, using bitcoin technology and cryptocurrencies to reproduce conventional financial items, such as loans and insurance.
The polkadot price soared at the end of December. In January, it held up even though Bitcoin fell short of its highs of over $40,000.
Although polkadot has benefitted from the recent bitcoin price boom along with most other key cryptocurrencies, cryptowatchers think its rally would enable polkadot to increasingly compete with ethereum, which blockchain is used in most DeFi protocols.
“While competitors to ethereum are making strides and benefitting from the ongoing market rally, I think it’s very unlikely that these competitors will overcome the network effects that ethereum has built,” said Luis Cuende, cofounder of Aragon’s decentralized app platform, via Email.
“However, until ethereum 2.0 is fully functional, polkadot, cosmos and near are well positioned to capture a meaningful market share.”
The highly awaited launch of Ethereum 2.0, with the booming DeFi market that is almost entirely built over and above the etherum blockchain, expected to enhance scalability and protection on its network, this week pushed the pricing of etherum above its all-time high in early 2018.
Because of the rising interest among large institutional investors in the creation of a decentralized internet, smaller cryptocurrencies are becoming progressively visibly bitcoins.
“Although bitcoin is viewed as a macro inflation asset, ethereum has the potential to be the foundation for a new decentralized capital market infrastructure,” said Seamus Donoghue, Swiss digital asset infrastructure startup vice president of growth, Metačo, in an e-mail statement.
The basic infrastructure is played out with new protocols like Cardano and polkadot, but the essential developer mentality and networking advantage Etherum currently needs to be resolved whatever the merits of their protocols is.
The vast majority of global cryptocurrency market prices currently include bitcoin and etherium, which accounts for around $750 billion of the overall market cap of $950 billion.
‘It’s early but the whole market looks cheaper than Bitcoin,’ said Donoghue.