In the dynamic world of cryptocurrencies, narratives often shape investor sentiment. Recent discussions concern the potential selling of Bitcoin to invest in Ether.
The Capital Flow Debate Between Bitcoin and Ether
The notion of significant capital rotation from Bitcoin to Ether has gained traction amidst Ethereum's success in DeFi and NFTs. However, research by expert Carmelo Alemán challenges this notion, asserting that Ether's price rise is not primarily due to massive Bitcoin sell-offs.
The Strength of Bitcoin's Realized Capitalization
A central point in Alemán's analysis is Bitcoin's realized market capitalization, which has reached an all-time high of $1.018 trillion. This indicates that the capital invested in Bitcoin remains stable, as long-term holders are not keen on selling their assets.
Where is the Capital for Ether Actually Coming From?
Alemán argues that capital flows into Ether mainly come from new investments rather than reallocating funds from Bitcoin. This could be driven by fresh inflows from institutional and retail investors, as well as conversions from stablecoins.
Overall, the analysis shows that the prevalent narrative of capital rotation from Bitcoin to Ether is not supported by facts. Major cryptocurrencies can grow simultaneously, attracting new capitalizations.
