Even though the overall value of all cryptocurrencies (altcoins) hasn’t yet reached its peak from November 2021, the money flowing within these projects and into them is still relatively unchanged, showing little growth or decline.
In simpler terms, Market analyst Ki Young Ju, head of CryptoQuant, recently noted that the current value of all altcoins combined resembles the value of Bitcoin (BTC) which has more than doubled since 2021. He predicts that only a limited number of altcoin projects with robust practical applications and compelling stories will thrive in this market environment.
From my perspective as a researcher, I’ve discovered that when considering the market cap of all cryptocurrencies except for Bitcoin and Ethereum (ETH), the value of alternative coins (altcoins) is approximately $943 billion at present.
During the significant surge in November and December 2024, the value of altcoins momentarily reached an all-time peak of $1.1 trillion in total market capitalization. Yet, this high was short-lived as the market cap swiftly reverted back to its current values.
(Note: The year 2024 is a placeholder for the actual year.)
Altcoin season is different this time
Previously, the CEO of CryptoQuant had cautioned that this market cycle might deviate from past patterns and stated that the traditional phenomenon known as ‘altseason,’ which is often sparked by investors shifting their profits from Bitcoin to other cryptocurrencies, may not occur in the same manner this time around.
Instead, the upcoming altseason may hinge on the availability of stablecoin liquidity and an increase in the number of pairs for trading stablecoins, as suggested by Ju.
Ju’s analysis indicates that an uptick in stablecoin transactions involving altcoins could be indicative of new funds flowing into the altcoin market. This trend may signify a genuine increase in demand for altcoins, rather than just capital shifting from other digital asset categories to altcoins.
Investment moves towards Bitcoin and Ether Exchange-Traded Funds (ETFs) marks a significant change compared to past trends, as the funds stay confined within the ETF system instead of flowing directly into on-chain cryptocurrency markets.
This implies that investors with holdings in these ETFs might find it more challenging to transfer their investments from Bitcoin and Ether exchange-traded funds towards less capitalized alternative cryptocurrencies, as suggested by the CryptoQuant analyst.
By December 2024, the founder of Hartmann Capital, Felix Hartmann, foresaw that many alternative cryptocurrencies (altcoins) might undergo a gradual decline or “slow bleed,” lasting until around late January 2025.
The venture capitalist contended that it wasn’t particularly advantageous (alpha) to set up altcoin investments, as the market needed to recover after a period of consolidation first.
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2025-01-10 20:54