At the beginning of 2021, the prices of Bitcoin and Ether became the focus of attention, as each asset seemed to hit a record high every 24 hours, and traders demanded USD 100,000 in BTC and USD 5,000 in ETH. Fast forward to the present, these two assets are still down more than 40% from their all-time highs, and there are no longs demanding incredible price targets.
A recent CoinMetrics report reviewed the performance of Bitcoin and altcoins in the second quarter of 2021. Analysts found that even in the case of a sharp correction in the market on May 19, many assets were traded with Dogecoin in the quarter. Price closing (dog) Topped the list with an increase of 392%.
Ethereum Classic (and many more) And Polygon (MATIC) are the other two breakthrough stars in the second quarter. Although the price of Bitcoin has fallen by nearly 39%, they have risen by 297% and 227%, respectively.
Ethereum network shows strength
One of the biggest developments in the second quarter was that the price of Ethereum broke through from US$1,971 on April 1 to a record high of US$4,362 on May 11. The subsequent market sell-off resulted in a quarterly closing price of US$2,240, an increase of 13.2%.
CoinMetrics emphasized that the price of Ether “benefits from a renewed surge in retail interest, partly due to the rapid rise of NFTs.”
Due to the surge in retail sales, the number of addresses holding at least 0.1 Ether increased from 4.58 million to more than 5.2 million.
Compared with the sharp decline of Bitcoin, the positive ending of Ethereum also shows that the top-ranked altcoins are receiving more and more attention Received from institutional investors Hope to stay away from BTC and achieve diversification.
The rise of altcoins triggered a decline in Bitcoin’s dominance
As mentioned earlier, the best performance in the second quarter came from DOGE. Although it was down 66% from the historical high of $0.74 set on May 8, it still achieved a growth of 392% in the quarter.
The report shows that the number of addresses holding at least 1 DOGE has increased from 3.09 million on April 1 to 3.7 million addresses on June 30. The DOGE address continued to increase in June, while the new Ether address remained basically the same at the end of May.
Due to the rise of altcoins, Bitcoin’s dominance fell to 45% on June 30, the lowest level since July 2018.
CoinMetrics pointed out that the significant resistance facing BTC was partly due to China’s crackdown on cryptocurrency mining, which caused the hash rate to drop by 50% in the second quarter to its lowest level since the end of 2019.
This drop may be temporary, and the hash rate “should eventually recover after the miners start to restore power at the new location”, but CoinMetrics warns that “this will not happen overnight because the construction and installation of adequate facilities requires time”. Adapt to the sudden influx of new demands. ”
Overall, CoinMetrics and other analysts see this development as a long-term positive development of the Bitcoin ecosystem moving forward.
“In the long run, this large-scale migration should be beneficial to a large extent because it will help the Bitcoin hash rate to be further distributed around the world and eliminate the previous concentration in China. It can also help improve The impact of Bitcoin on the environment is because miners in certain areas of China rely on coal.”
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