The Ethereum to USD exchange rate slipped ever so slightly on Monday, falling 0.46% to $303.14. However, the fall against Bitcoin was of a different magnitude.
The Ethereum to Bitcoin rate fell 5.47% to 0.06249410 BTC.
Why was there such a stark discrepancy?
At first blush, one would imagine that bearish Ethereum news was the culprit. Perhaps Internet trolls created another hoax about Vitalik Buterin’s death. Or maybe there was another Ethereum flash crash. Either of these explanations would have made sense to lower the ETH price forecast.
But that’s not what happened. ETH prices weren’t moved by anything relevant, and they still appear on track to reach $400.00 as soon as November. They were simply caught up in a normal rotation from altcoins to Bitcoin.
As un-glamorous as that explanation might sound, it happens to be true.
BTC dominance—a measure of Bitcoin’s share of overall cryptocurrency market cap—hit a five-month high on Monday. It reached 52.2% even as the overall crypto market cap grew to $153.8 billion, meaning this it wasn’t simply a rush to safety. It was a genuine tailwind for Bitcoin.
The anticipation of Bitcoin’s hard fork gave investors a reason to bet on the original cryptocurrency, even if it meant temporarily abandoning their preferred altcoins.
Note the use of the word “temporary” in that sentence. Data from the past year shows a secular decline in BTC dominance that makes it unlikely to remain above 50% for long.
In any case, Ethereum has its own fork on October 16.
The Byzantium fork, as it’s called, is poised for a smooth rollout. Core developers met last week to discuss the upgrades, during which none of them had major concerns. If all goes according to plan, the platform will have crossed a major milestone in its scaling plan.
Completing the Byzantium fork is no minor accomplishment. Bitcoin is robbing much of that attention at the moment, but investors will eventually return to altcoins once the hype has passed. When they do, I am confident that ETH will accelerate to $400.00. Beyond that, we expect use-case development to push ETH towards our Ethereum price forecast of $1,000.
Also Read: Hold on to Ethereum for the Long Term