Many terrible tokens are trading at crazy prices
Bitwise Investment Director Matt Hougan wrote a thread about the current market situation. Let's note some interesting thoughts:
— The main driving force behind the altseason is the classic “wealth effect.” Cryptocurrencies have made good profits on Bitcoin and are redistributing capital to alts.
— The altseason is not associated with the high profitability of Bitcoin as a percentage (it grew by only x4 of the loys, which is much less than previous cycles), but with the total amount of wealth. Bitcoin's market capitalization has grown by $1 trillion - that's a lot of money.
— Many investors take their income from Bitcoin and transfer it to alts. Since the capitalization of alts is small, they are easier to pump. More wealth in Bitcoin means more money in altcoins.
— The technological infrastructure of altcoins has improved significantly. Dencun on Ethereum and L2 solutions are a real revolution, making public use of the blockchain much more interesting.
“Combining the record increase in wealth from Bitcoin and the technological advancement of alts gives us a visible result - strong growth in alts.
— The current bull market and altcoin season are different from previous ones. Previously, the growth of altcoins limited the growth of Bitcoin because there was a cap on capital and it flowed over. But the rally in 2024 is driven by entirely new money (not crypto money) coming from ETFs. The wealth effect can continue as long as more new money flows into the ETF than old money goes into the alt.
— The bull market is in its early stages. In this cycle there will be a “season of everything”, and not the already familiar “altcoin season”.
- All that glitters is not gold. There are many terrible projects on the market that are funded in raging bull markets. And many of them are already trading at crazy prices. Of course, there are also great projects.
