Ripple's dominance, XRP's measure of market share by market capitalization in the highly competitive cryptocurrency segment, is a warning sign this year.
XRP dominance trends declining
XRP dominance is down 3.63% this week, 18.83% over the past month, and 10.63% over the past six months. In the one-year window, Ripple's percentage market share of all cryptocurrencies fell by 11%. Over the five-year period, the value has fallen by 82%. Its competitors in the market capitalization chart perform significantly better.
Bitcoin (BTC), for example, has only lost 10.59% of its market share in the last five years, not 82% like Ripple. Meanwhile, Bitcoin dominance has grown by 28.65% over the past year, 6.85% over the past six months, and 1.6% over the past month. But Ethereum might be a more useful comparison.
Ethereum (ETH) dominance has declined on a monthly to annual basis, but not as much as XRP dominance. Over the past month, ETH’s dominance has only fallen by 3.3%, compared to XRP’s 18.83% plunge. In the long term, Ether's market share has increased by 90% over the last five years.
Here are some possible causes for the decline in XRP dominance over crypto market share.
SEC lawsuit and falling Ripple market share
Over the past month, XRP dominance has declined dramatically as XRP price consolidated over the past 30 days while Bitcoin price rose by around 19%.
The price of Ether saw an increase of around 15% during the same period. Unfortunately for Ripple, a cloud of uncertainty looms as traders and investors wait for the SEC lawsuit to be heard in four months.
One bright spot regarding XRP dominance is the 6-month chart, where Ripple's 10.63% decline is actually slightly better than Ether's 12.91% decline. During this period, Ripple Labs scored a number of major victories against the SEC in court, which were reflected in the XRP price in the markets.
Ripple Labs has been fighting the Securities and Exchange Commission in court since December 2020. The resulting regulatory uncertainty has been a headwind for XRP tokens for three years. Developments in the SEC lawsuit over the next four months will likely be key factors in Ripple's price movements and market share.
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