How Ethereum's increase in value, up 350% this year, and the rise of NFTs and DeFi have dampened enthusiasm for Bitcoin as the most essential crypto
Context & Ripple Effects
This piece lands mid-arc in a year-long rotation story. In February, Bitcoin crossed $50K while Ethereum hit a record $1,785, up ~140% YTD — both rallying, but Ether already outpacing. By early May, Bloomberg reported [[a:965918|Bitcoin's share of total crypto market value had slipped to ~46% from ~70% at the start of the year]]. The 350% YTD figure here extends that drift into September, with NFTs and DeFi giving Ether a usage story Bitcoin lacks.
The corpus also shows how the arc bends back: a 2025 report has Ethereum struggling to keep the interest of investors and developers, suggesting the enthusiasm documented here proved cyclical rather than structural.
First-order effects
- Bitcoin's 'most essential crypto' framing weakens among investors tracking relative performance, since Ether's 350% YTD gain and its NFT/DeFi activity give allocators an application-driven alternative.
- Ethereum captures the developer and user attention that comes with hosting DeFi and NFT markets, reinforcing the dominance erosion already visible in Bitcoin's falling market-share figures.
Second-order effects
- DeFi's growing fee base — monthly fees up to $577M from $366M in April, per the related coverage — gives Ethereum a revenue argument beyond price momentum, with Buterin pointing to low-risk payments and savings apps as the Google-style business that could sustain it.
- Capital and projects built on Ethereum pull adjacent players toward it: the corpus notes TradFi-DeFi convergence making dual fluency valuable for stablecoin roles, raising the bar for any chain that wants those flows.
Third-order effects
- If the pattern holds, crypto market leadership becomes contested per-cycle rather than fixed — but the later coverage shows the flip side: by March 2025 Ethereum itself was reported as losing investor and developer interest, indicating no platform holds the application crown without sustained usage.
- Structurally, valuation weight migrates from a single reserve asset toward platforms that monetize activity, making fee revenue and active addresses — metrics that later dipped alongside ether burned — the scoreboard that matters more than dominance percentages alone.
The trend: Crypto leadership keeps rotating between Bitcoin's store-of-value narrative and Ethereum's application platform as DeFi, NFTs, and usage metrics — not just price — decide which chain investors treat as essential.