Altcoins only have risks
Cryptocurrency analysts say that as the cryptocurrency market is driven by a narrative of weakness, the "high risk, high reward theory" of altcoins in the past may only be high risk. Markus Thielen, head of research at 10x Research, told foreign media Cointelegraph:
“While there are tactical opportunities, the days of 100x returns may be over.”
Markus Thielen pointed out that despite market expectations for an altcoin bull run in 2024, retail investor participation is still quite sluggish, with few new projects attracting the attention of non-native cryptocurrency traders.
Markus Thielen said that past altcoin bull markets had “clear features” of attracting more capital, but this cycle has shown “funding constraints,” as evidenced by low total locked asset value and a lack of venture capital investment. Markus Thielen added:
“In the last cycle, the narrative that cryptocurrencies could replace the traditional financial system was widely accepted, but the narrative in this cycle has a shorter lifespan and lacks substantial support.”
Sell Bitcoin Betting on Altcoins
Still, there are those who believe altcoin season will emerge during this bull run. Michael van de Poppe, founder of MN Trading Consulting, noted in an X tweet on May 16 that he had recently sold all of his Bitcoin swap altcoins, claiming that he “could lose 50 to 80%.” Michael van de Poppe said a portfolio holding mostly altcoins could carry "relatively large" risks.
“What are the downsides to this bet? There are a lot of downsides. At the time of publishing, my overall investment has dropped about 20% in 1-2 weeks. That’s fine with me because I’m I will find a way to continue my life and generate income. On the other hand, I will probably make a 300-900% return in Bitcoin value in the next 6-12 months.”
Altcoins Can’t Outperform Bitcoin
Meanwhile, cryptocurrency investor Fabio Andreatta is skeptical that there will be an “Altcoin season.” Andreatta said in response to van de Poppe's X post:
“All you do is increase your risk and it’s almost impossible to beat Bitcoin. Most altcoins will never reach their all-time highs again.”
According to data from TradingView, Bitcoin dominance (BTC Dominance) is approaching its highest point of the year and currently stands at 55.88%, up approximately 2% in the past seven days.
This article Is Altcoin Season coming? Is Stud Copycat still “high risk, high reward”? First appeared in Zombit.
