Is this the new way to rate Bitcoin, Ethereum, and Altcoins?

A few years ago there was talk of Bitcoin in the foreground of every discussion about cryptocurrencies. Prices and rallies revolved around the movement of the king coin and it ruled a high market dominance. However, since 2019 the dynamic has changed significantly.

With increasing adoption, interest and growth of other digital asset projects, the industry has been divided into different sectors. In addition, their performance has also changed significantly over the last couple of bullish / bearish trends.

Meet the Sectors

According to a recent report by Messari, the digital asset sectors are currently divided into DeFi, currencies, Web3, decentralized exchanges and smart contract platforms.

Source: Messari

According to the attached graph, DeFi and Currencies had a huge week in terms of market growth. The DeFI sector took the top spot with 23%, supported by Terra (+ 50%), Amp (+ 77%) and THORChain (59%). Bitcoin led the currencies with a price increase of 22% last week.

The sector classification was made taking root functionality into account. In the graphic below, it can be seen that Ethereum, Binance Coin, and Cardano fall into the smart contract platform category, while Bitcoin, DOGE, LTC, XRP, etc. are more like currency-like assets.

Source: Messari

Does the sector assessment allow a better understanding of the development?

Possibly. The benefit of such a comparison is that investors can see the popularity of similar projects and whether their goals translate into consistent market capitalization growth.

For example, the growth of decentralized exchanges or DEXs is pretty well known due to the rise of Uniswap, but the DEX sector includes PancakeSwap, SushiSwap, RUNE, Curve, among others, and their combined growth was 15% over the past week. As such, a combined valuation may allow us to better assess the overall interest in DEX’s assets.

Accordingly, smart contract platforms and Web3 portfolios performed worst. This may seem surprising as major assets like Ethereum, BNB, Cardano all fall into this category. It’s a good rating, however, and paints a broader picture in which the smart contract platform’s assets also saw a period of lesser interest.

Does it carry weight for trend changes?

There is no clear answer as some of the projects defined under certain sectors such as DeFi and Web3 are relatively new entities in the digital asset market. Sector portfolios cannot lead or trigger an overall trend, but control remains with the currency sector. And that’s only because of Bitcoin.

Market cap dominance remains key to bringing capital into the ecosystem. This can also improve the general liquidity of the collective area.

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