The crypto market as a whole grew by more than $2 trillion year-over-year, with altcoins collectively up 70%. So why are so many recent launches underperforming? The main reason is attention dilution as millions of new tokens are launched in 2024.
@pumpdotfun is single-handedly responsible for the launch of over 2 million meme coins, which greatly dilutes the overall attention. Institutional participation has become more critical than ever for the network, and this was best demonstrated with the launch of the Bitcoin ETF.
Does the increase in token listings indicate a focus on quantity over quality?
Users may feel overwhelmed by the choices, leading to reduced activity on platforms like Coinbase. They may become fatigued or uninterested in new coins due to market volatility, regulatory issues, or a lack of compelling applications.
Source: Vernacular Blockchain
Institutional support is one of the reasons why tokens like $MOCA, $SOL, $BNB, and $TON are performing better. As @blockchaingmg put it, “The $MOCA token from @animocabrands was the only bright spot, with a 51% price increase since launch.”
@animocabrands will now expand investing capabilities to include listed tokens, focusing on their portfolio. In this competitive market, Web3 projects that attract institutional attention will be more likely to stand out, thereby partially mitigating the attention dilution problem.
Various opinions have been analyzed in detail by @hosseeb and other experts, with one of the most talked about causes being high FDV. Although there are many factors involved, the conclusion is that these problems are not fundamental.
Currently, the launch of alternative coins far outpaces the growth of Web3 network players, similar to the launch of websites, message boards and chat rooms during the dot-com bubble, or the launch of smartphone apps from 2010-12.
Source: Vernacular Blockchain
Unlike roughly 80% of institutional participation in the U.S. stock market, digital assets currently attract only 5% of institutional funding, and that's mostly focused on Bitcoin, meaning there's plenty of room to grow.
Although building communities and expanding functional networks are still very important and are at the core of project products and services, in my opinion, projects that can attract institutional participation will have an advantage in the current market environment.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "Foresight News"
Original author: @ysiu
