In the first half of 2024, BTC took the lead and entered a remarkable bull market, while the altcoin market failed to prosper at the same time. There are many profound and thought-provoking reasons behind this phenomenon:
The wisdom of veteran players: Today, veteran players in the cryptocurrency field have shed their impulsiveness and blindness when they first entered the industry, and replaced them with calm minds and rational judgment. They are no longer easily swayed by market sentiment, but make investment decisions based on in-depth analysis and sound strategies, which makes it difficult for the altcoin market to rely on short-term speculation to stir up waves.
The concentration effect of market capitalization distribution: With a total volume of about $2 trillion in the entire cryptocurrency market, mainstream currencies such as BTC and ETH occupy a huge share of more than $1.6 trillion, leaving only a small space of less than $400 billion for all other altcoins. What is more serious is that with the explosive growth of altcoins, this limited market capitalization has been continuously diluted, making the upward momentum of individual projects increasingly weak, and the road to price increases is full of thorns.
The double-edged sword of exchange behavior: Recently, large exchanges have frequently introduced VC coins (venture capital-backed tokens). These tokens are often accompanied by inflated market capitalizations and continuous unlocking pressure, like time bombs, which gradually alert investors. They began to realize that blindly chasing newly launched tokens may mean stepping into a trap, so they are more cautious about holding on to their wallets and are reluctant to sell easily. Such behavior of exchanges has undoubtedly further exacerbated the liquidity crisis in the altcoin market, making it even more difficult to highlight its value.
The cryptocurrency world, a field full of variables and miracles, always reflects the complexity and variability of human nature. Although the market is always looking forward to the emergence of the next hot spot to ignite the enthusiasm of investors and the vitality of the market, in the current environment, such a hot spot seems to be still brewing.
As for the future fate of the Ethereum spot ETF, there are different opinions in the market on whether it can be approved smoothly, how much new funds it can attract, and whether it can trigger a market boom. Under the sweeping wave of AI, although speculative funds are abundant, their flow is particularly picky. Compared with the Web3 field, which is still in the exploratory stage, traditional financial markets such as the stock market have become a more favored safe haven for these funds due to their more mature and stable characteristics. Therefore, at least in the short term, if Web3 wants to attract a large amount of external hot money, it still needs to achieve major breakthroughs in narrative construction and substantive progress.
