Ethereum becomes the leader in Q3 crypto asset recovery: How is the market changing?

Source of article: Financial Associated Press

The crypto asset circle is quietly changing. As capital flows into altcoins, DeFi protocols and a new wave of tokenized assets, Bitcoin's leading position is being challenged.

A CoinGecko report states that Ethereum emerged as the frontrunner for the cryptocurrency’s third-quarter recovery, citing strong demand for ETFs, corporate finance departments’ focus on Ethereum, and surging interest in tokenized real-world assets.

Data showed that Bitcoin rose about 7% in the third quarter, while Ethereum rose 68%, recording its best quarterly performance in more than three years and breaking the traditional trend of Bitcoin leading the rise.

Analysts pointed out that in the past, Bitcoin’s price surged due to inflows from ETFs, but now the market’s focus has shifted, and this shift will evolve into one of the decisive trends in the fourth quarter.

According to data from CoinMarketCap, at present, Bitcoin still occupies a dominant position, with the total market value accounting for 58% of the total market value of cryptocurrencies, but this is down from over 60% in the first half of the year. Ethereum’s market value accounted for 12%, down nearly 2 percentage points from the year’s high in early September.

Bullish on cryptocurrencies

The CoinGecko report shows that DeFi (decentralized financial system) will fade out of sight at the end of 2024, but the total value locked in lending and staking protocols continues to rise with the rise of Ethereum. Its total locked value climbed from US$115 billion in early July to US$161 billion at the end of September, an increase of 40.2%.

At the same time, the total market value of the top 20 stablecoins surged by $44.5 billion, reaching an all-time high of $287.6 billion, and continued its gains in the fourth quarter.

David Duong, head of research at Coinbase Institutional, noted in a report that most institutional investors remain bullish on cryptocurrencies. An institutional investor survey report by the agency showed that 67% of institutional investors are optimistic about the price of Bitcoin in the next three to six months.

Duong said that cryptocurrencies still have room to rise, liquidity remains resilient, the macro situation continues to be favorable, and U.S. regulations are also dynamically supporting the market.

He expects that the Federal Reserve will cut interest rates twice more this year and that large money market funds are taking a wait-and-see attitude towards cryptocurrencies. These factors may drive market trends in the fourth quarter.

At the same time, another CoinGecko survey showed that a quarter of cryptocurrency participants currently value altcoins more and reduce the proportion of Bitcoin in their investment portfolios. But more than a third of participants still prefer to hold on to Bitcoin and wait for the next rise.
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