Et Tu Bitcoin? - Is the train about to leave the station?

It seems really strange to me that there is still so much apathy amongst the average 'man on the street' when it comes to cryptocurrency and crypto digital assets. I recently attended a family wedding where I interacted with at least a dozen persons of the younger generation ie: under the age of 35 years and of that dozen only 2 had a decent grasp of crypto assets and less than half a dozen were even mildly interested. The rest just stared at me with glazed eyes whilst I evangelized why they should be getting involved.

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There are so many more fundamental influences this BTC cycle that it is difficult to envisage exactly how long this bull market will last. To this end I decided to try and correlate the past cycles with what is happening now. I am not a super technical analysis type guy, so decided to use a simple metrics like market cap dominance, comparing the previous 'known' behaviour with what is happening now. I was pleasantly surprised to discover that there does appear to be a correlation

Right click and open in new tab to see the picture clearly

Jan 2017 to May 2017 BTC dominance is slowly dropping and Ethereum dominance is increasing

January 2021 to May 2021 the same is happening, BTC dominance is steadily dropping while Ethereum is increasing

So let us see what happened in the previous cycle from May onwards to the cycle top in December.

January_to_December 2017.png

We know that previous performance does not imply future performance, but I am quietly confident that there will be a form of correlation going forwards and I shall base my investment strategy around this 'perceived' correlation. That does not mean I will not be flexible.

At it's peak the dominance ratio between BTC and Ethereum was approximately 1.4 to 1. In January it was 21 to 1.

At present the ratio is approximately 3/1 having dropped from 7/1 in January. There are other mitigating circumstances for the low ratio now, not least being the DeFi ecosystem as well as 'staking'.

I am going to keep an eye on the dominance ratio between these two, especially as we approach mid-June and should the ratio get close t0 parity I shall maximize my BTC holdings and prepare for takeoff!!

Of course NONE of this is investment advise. It is merely me playing with numbers and speculating around the future of BTC.

As always, thank you for stopping by.