Is ether really an “altcoin” at this point?
Just like bitcoin, it’s here to stay. Let’s face it.
For as long as I’ve been involved in web3, the term “altcoin” has been shorthand for “everything other than bitcoin.”
There is certainly at least one objective reason why such a distinction is useful: Bitcoin continues to have a comfortable majority share of the global token market. So-called “bitcoin dominance” now stands at 57% of the $2.1 trillion crypto market worldwide, according to CoinMarketCap.
But I have always felt there is a squishier, more subjective connotation to “altcoin” as well. The term carries a whiff of “iffy stuff that might plausibly just go away at any moment.”
As in: “We know this bitcoin thing will last. But all these other tokens? Meh.”
Heck, the most hardcore bitcoiners, known as maxis, will even say such things out loud. Everyone else in crypto is mostly content just to imply it, purposefully or not.
For more than 99% of the 2.4 million tokens that CoinMarketCap tracks, I would even agree with that framing. Yes, most of those tokens could plausibly go to zero.
And, yes, bitcoin is fundamentally different, more mature, more integrated with conventional finance, with real scarcity and true decentralization, and thus likely to hang around for the long term.
But I would also say at this point that ether, the native token of the Ethereum network, represents a pretty similar exception. It’s the number-two token by market cap, with a $274 billion market cap that comprises 14% of the global crypto market.
(Full disclosure: I do own small amounts of both ether and bitcoin.)
For perspective, here’s how ether’s valuation stacks up against the market caps of some notable public companies as of Friday’s close on Wall Street:
- Coca-Cola: $308 billion
- Netflix: $299 billion
- Ether: $274 billion
- McDonald’s: $213 billion
- Uber: $152 billion
- Goldman Sachs: $151 billion
Just as important, as a development platform, Ethereum has shown real network effects in recent years. Clearly, there are now people building on it because other people are building on it, which then attracts more people to build on it over time.
I know that may sound weird or crazy or even shady to some folks, but it’s really not. It’s similar to when you see users joining a social platform because their friends are joining it, which then makes the company running the social platform more valuable. This pattern is evident — and it’s purposefully cultivated and very powerful when executed correctly — all through the tech industry.
For ether, it’s also a good reason why the term “altcoin” might not really apply anymore.
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