As the cryptocurrency market enters a new bull market, funds are spilling over from Bitcoin to other competing coins. CryptoQuant CEO Ki Young Ju believes there is no longer an obvious trend of funds flowing from Bitcoin to altcoins. Ultimately, many altcoins may decline due to the lack of new fund inflows. He points out that this round of altcoin season will be different from previous ones, with only a few assets able to achieve significant returns.
Even though market sentiment is quite positive, the lack of new funds entering altcoins may limit the price growth of most altcoins. He believes Bitcoin is gradually separating from the cryptocurrency ecosystem, shifting towards a paper-based Layer-2 development model based on ETFs and stocks, meaning that the inflow of traditional institutions like ETFs has a more pronounced effect on Bitcoin's price fluctuations, making it difficult for funds to flow effectively from Bitcoin to altcoins.
However, the rise of altcoins comes more from stablecoins and fiat trading pairs rather than their correlation with Bitcoin, unlike Bitcoin which can directly attract fund inflows from traditional financial markets. Currently, competing coins are still stuck in a smaller-scale cryptocurrency market and cannot obtain significant fund inflows. This also reflects the structural changes in the current market model. However, the top twenty competing coins have still shown decent returns recently, confirming our earlier mention of altcoin season. Nonetheless, it is undeniable that this fund spillover effect may weaken in the future.
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"MICA Daily｜CryptoQuant CEO believes that the returns of competing coins may not meet expectations in the future" was first published on (Block客).