Bitcoin and cryptocurrency traders are looking at a sea of red on exchanges today as major cryptocurrencies dive.
The bitcoin price has dropped from over $35,000 per bitcoin last night to under $33,000, currently down almost 10% on the last 24 hours in a continuation of a sell-off that’s wiped over $100 billion from the total value of the world’s biggest cryptocurrency in a week.
Bitcoin’s slump has dragged on other top 10 cryptocurrencies, with ethereum, Ripple’s XRP, litecoin and cardano all down between 5% and 10%—although polkadot, a rival to the second biggest cryptocurrency ethereum, has managed to hold onto its recent gains.
Polkadot’s dot token has climbed a staggering 450% since August, soaring amid a surge of interest in decentralized finance (DeFi)—using bitcoin and cryptocurrency technology to recreate traditional financial products such as loans and insurance.
The polkadot price exploded in late December and has continued to climb through January, managing to maintain its rally even as bitcoin dropped away from its highs of over $40,000.
While polkadot, along with most other major cryptocurrencies, has benefited from the recent bitcoin price boom, crypto watchers think its rally means polkadot is going to be increasingly competing with ethereum, the blockchain on which most DeFi protocols run.
“While competitors to ethereum are making strides and benefitting from the ongoing market rally, I think it’s very unlikely that these competitors will overcome the network effects that ethereum has built,” Luis Cuende, cofounder of decentralized app platform Aragon, said via email.
“However, until ethereum 2.0 is fully functional, polkadot, cosmos and near are well positioned to capture a meaningful market share.”
The hotly-anticipated launch of ethereum 2.0, expected to improve scalability and security on its network, along with the booming DeFi market that’s almost entirely built on top of ethereum’s blockchain, this week pushed the ethereum price above its early-2018 all-time high.