ERC-20 token’s market cap overtakes Ethereum’s

The latest findings by Santiment, published in Cointelegraph Consulting’s biweekly newsletter, suggest that Ethereum is temporarily being ‘professionalized’. 

Since the September 2nd market crash, the combined market capitalization of all ERC-20 assets has overtaken Ethereum’s own market cap, with the differential between the two continuing to grow in favor of ERC-20 assets. This market cap ‘flippening’ points to the fact that the price of Ethereum has corrected more strongly than the ERC-20 ecosystem and has struggled to bounce back in the immediate aftermath. 

Perhaps unsurprisingly, it was the DeFi-related coins in particular that managed to bounce back much quicker than ETH; according to Santiment’s DeFi watchlist, the collective market cap of DeFi-related assets has grown by +15.6% in the past week alone. In comparison, Ethereum’s own market cap has grown by +7.7% in the same period.

However, Ethereum’s scalability challenges may halt further progress. Ethereum’s daily average fees are at a massive $5.24; up until the beginning of August, Ethereum’s daily average fees for 2020 hovered around $0.38. The amount of addresses sending or receiving Ethereum daily has dwindled from 505,440 on August 5 to 312,860 on September 14, marking a -38.1% decline. 

Also, further price appreciation of Ethereum is difficult, because Ethereum’s 365-day MVRV ratio, which — even with the recent correction — presently sits at 1.44, indicating that ETH’s veteran holders are, on average, up +44% on their initial investment.

This has been a historically strenuous level for Ethereum, as ETH’s 365-day MVRV ratio peaked at +43% in May 2018 right before a drop, and at +48% in February 2020 prior to a correction. Should long-term holders begin to lose confidence in Ether’s short-term price action, this has been a familiar zone for them to take some profit in the past. 

Read the full newsletter edition here to get the entire scoop, complete with charts and images.

Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. With market intelligence from one of the industry’s leading analytics providers, Santiment, the newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives. 

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