Ethereum co-founder Vitalik Buterin admitted that Ethereum is losing its lead in the cryptocurrency market.

Speaking on the Unchained podcast, Buterin said that losing a chunk of market share was “inevitable and unavoidable” for both the crypto projects. The 25-year old developer referred to new blockchain projects that were taking different approaches to reach the same goal as that of Ethereum, thereby taking away some part of its community. He told host Laura Shin that:

“It [Ethereum] has lost some of its lead to some extent. It’s kind of inevitable and unavoidable. Ethereum really was the first general purpose smart contract thing. Bitcoin was, for example, the first cryptocurrency and originally, it had 100 percent of the market share. Then, it went to 90 and now it’s at 55.”

Market share refers to the percentage of one asset’s market capitalization against the total valuation of the asset’s industry. The first cryptocurrency bitcoin gained a natural lead over other crypto projects. It continues to hold the first rank of biggest cryptocurrency by market cap. Nevertheless, the rise of competing projects, starting with Litecoin, Dash, and followed by Dogecoin, XRP, Ethereum, Bitcoin Cash, amongst many others kept sneaking away little portions off bitcoin’s once-100% market share.

.@laurashin asks @VitalikButerin, "Would you be upset if another blockchain took the lead [ahead of ethereum]?" Buterin jokingly responded, "It depends which blockchain … If #TRON takes over ethereum, I'll have lost a certain amount of hope for humanity, not nearly all."

— Christine Kim (@christine_dkim) March 21, 2019

However, losing market share does not mean that bitcoin is shrinking. The cryptocurrency market capitalization, on a whole, was just $1.59 billion on April 23, 2013. And now, its valuation is well above $141 billion. Similarly, Bitcoin’s market capitalization on April 28, 2013, was $1.50 billion.

And now, it has surged to $71.95 billion. Of course, bitcoin’s market share is now 48-percent less than what it used to be in 2013. But it does not mean its individual valuation has gone down. As a standalone project, bitcoin is ballooning as it was all those years.

From an investor’s point of view, the market now has more crypto projects than ever. Traders have more options to spread their portfolio and distribute their risks across multiple crypto-assets. It might have to do with an asset’s long-term potential, but it can also be about hedging near-term – to make profits from intraday price volatility.

But the crypto market is not just a few traders anymore. According to a study published by the University of Cambridge last December, the number of cryptocurrency users almost doubled in the first three fiscal quarters of 2018. Excerpts from the report:

“Combining public data and survey findings, we estimate that the total number of user accounts at service providers amounts to at least 139 million in late 2018. Using a combination of verified user data and the average share of ID-verified accounts described above, we also estimate there are currently at least 35 million ID-verified users globally.”

Source: University of Cambridge

An increase in user-base means that more fiat assets flew into the crypto market, benefitting bitcoin as well as rest of the cryptocurrency market. The only difference remained that investors now had more assets to invest other than bitcoin, which is why the leading crypto asset lost some part of its market share. Again, it doesn’t mean that it lost the lead.

Buterin rightly said that it was a win-win situation for everybody and no one blockchain plan was competing with the other.

“I want to see an environment where different approaches to things can thrive and prosper. Ethereum can win and other projects that do interesting things can win too.”

[Disclaimer: The author is holding long positions in Bitcoin and Ethereum markets.]

The post Vitalik Buterin: “Inevitable” That Ethereum Loses Some of its Lead in Crypto appeared first on NewsBTC.

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