Historical bull markets have typically been led by altcoins. Does this mean a more serious altcoin rally is just around the corner?
Bitcoin has dominated the early rise of the crypto bull market.
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Posted on March 2, 2024 at 12:04 PM ET.
bitcoin price Over $60,000 The world's largest digital asset by market capitalization dominated the early stages of a bull market rally, where altcoins typically perform the strongest. But as altcoins have started to soar recently, could this be a sign that a new altcoin season is upon us?
Bitcoin's price on Saturday was just under $62,000, just a stone's throw from its all-time high of just over $69,000 on November 10, 2021. Bitcoin is up 22% in the past 7 days and 46% in the past 30 days. According to CoinGecko. Altcoin is simply “any coin that is not Bitcoin” and is a market led by Ethereum’s native token, Ether (ETH).Recently, ETH also over $3000 It hovered above $3,400 on Saturday for the first time since April 2022. It is up 16% in the past 7 days and 49% in the past 30 days.
read more: Is Ether heading towards $3,500?
“Ether has considerable momentum, breaking through the $3,000 mark and poised for its best weekly close in 97 weeks. “There is increasing discussion about the possibility of a 'season' starting,” Bitfinex's analyst team wrote in their latest weekly publication. Bitfinex Alpha Report.
In fact, other altcoins, including Solana (SOL), have started showing stronger performance recently. According to CoinGecko, it is up 26% in the past seven days, Aptos (APT) is up 30%, Shiba Inu (SHIB) is up 45%, and Dogecoin (DOGE) is up 62%.
Analysts at Bitfinex noted that there has been a recent stabilization of Bitcoin's dominance, or Bitcoin's market capitalization as a percentage of all cryptocurrencies' market capitalization., Slightly above 51% could mark the beginning of a period of altcoin outperformance. “Due to the similarities in current prevailing trends, we believe that 2024 could mark the beginning of a further period of altcoin appreciation over the coming months,” the report said.
This market difference
The current bull market is driven by U.S. regulatory approval for spot Bitcoin exchange-traded funds (ETFs) and the subsequent large influx of investor funds into those funds, with BTC prices steadily rising. It's unique.And 8 companies Already submitted Obtains potential approval for Spot Ether ETF, contributing to the expansion of the world's second largest digital asset by market capitalization.
“The early part of this bull market was decisively driven by BTC. In previous bull markets, it was common for alternatives to rally significantly in the early stages of the cycle, but this time is different.” Matt Barensweig, head of the Go network at BitGo, said in an email to Unchained. “Why? Because this rally is being driven by real organic net new institutional inflows.”
read more: Should you sell Bitcoin now that it's nearing all-time highs? expensive?
Valenswijk noted that nine new spot Bitcoin ETFs have been setting daily inflow records over the past few weeks. Excluding the Grayscale Bitcoin Trust, which was converted from an existing product to an ETF, the nine new spot Bitcoin ETFs have $21.2 billion in assets under management. On Thursday, BlackRock's iShares Bitcoin ETF (IBIT) became the fastest ETF to reach it. Assets $10 billionand do it in just seven weeks.
“This shows that there are a lot of new sources of demand,” Valenswijk continued. “Multi-trillion dollar asset managers such as BlackRock and Fidelity are now recommending crypto-allocated portfolios. This is a huge deal as it pertains to the adoption of Bitcoin in the market, which was dormant until just a few months ago. ”
However, Valenswijk said the differences in what is driving Bitcoin's surge do not mean altcoins will be locked out of the bull market.
“If you look at classic retail traded assets like DOGE, SHIB, and SOL, they have underperformed BTC over the past few weeks. However, as we enter the later stages of this bull market, we see a wave of retail participation build up. That’s to be expected,” Valenswijk said. “DOGE/USD bids are finally starting to get bigger, indicating that retailers may be joining the parade as we speak.”
However, not everyone agrees. Alex Thorne, Head of Corporate Research at Galaxy, said: He told Unchained on his podcast this week that while there is often a dynamic where investors' Bitcoin profits are converted into altcoins, that doesn't happen when those profits are generated in ETFs. , said there is no easy way to transfer it to other crypto investments.
“Historically there have been a lot of alternative seasons. [but] Many of them will stay on these platforms…[it] They may be held by long-term investors, such as in advisor-managed accounts, or on platforms with no way to replace them,” Thorne said. “by the way, [the effect] If ETH also acquires an ETF, it would actually weaken the momentum as the two assets cover most of the crypto narrative in the market, both in market cap and narrative. ”
