Crypto analysts are suggesting that the high-risk, high-reward nature of altcoins is becoming less favorable due to weak narratives in the crypto market. According to Markus Thielen, the Head of Research at 10x Research, the era of 100x returns may be a thing of the past. He pointed out that retail participation in the altcoin market is subdued and there are few new projects that are attracting non-crypto traders.
Thielen highlighted that previous altcoin bull markets had distinct characteristics that attracted more investment, but the current cycle is experiencing tighter capital and a lack of venture capital investments. The narratives in this cycle are shorter-lived and lack substantial backing compared to the previous cycle, where the narrative of crypto replacing traditional financial systems was widely embraced.
Recently, the Solana-based memecoin GameStop (GME) saw a significant increase of 2,727% alongside the rise in GameStop’s stock price. This surge was triggered by a meme posted by trader Keith Gill on his “Roaring Kitty” X account. However, Michael van de Poppe, the founder of MN trading consultancy, warned that holding a portfolio mainly consisting of altcoins poses a relatively huge risk.
Despite the risk, van de Poppe revealed that he recently sold all his Bitcoin (BTC) to shift to altcoins, acknowledging the possibility of a 50-80% loss. However, crypto investor Fabio Andreatta expressed skepticism about the prospects of an altseason, stating that most altcoins are unlikely to reach their all-time highs again.
The dominance of Bitcoin in the crypto market, which represents its market share relative to other cryptocurrencies, indicates that capital is shifting away from altcoins. Bitcoin’s dominance is currently at 56.05%, nearing a year-to-date all-time high.
It is important to note that this article does not provide investment advice or recommendations. Readers are advised to conduct their own research and assessment before making any investment decisions.