Crypto World News Report:
In this bull market, the long-awaited “altcoin season” seems to be making some noise recently. From APE to DYDX, SUSHI, many altcoins have experienced significant increases. Is this a true bull market or are altcoins taking advantage of the situation to pump and dump? Why is the usual “altcoin season” pattern not working this year?
How did the previous altcoin seasons happen?
In the past few bull markets, the arrival of altcoin season seemed to be inevitable. When the prices of Bitcoin and Ethereum surged, investors made enough profits from mainstream coins, and the funds gradually overflowed into the more volatile altcoin market, which could potentially bring higher returns. Thus, altcoins started to rise one after another under the push of these funds, forming a unique “altcoin season” trend.
However, in 2024, this pattern seems to have failed. Bitcoin soared to a high of $70,000 from $26,000 due to the halving event and the catalyst of ETF, and mainstream funds have already made substantial gains. According to common sense, this should be the perfect time for altcoins to shine, but reality is disappointing. Many investors who were waiting for a repeat of the historical trend found themselves trapped and suffered heavy losses. There are only a few altcoins that have outperformed Bitcoin this year, and it’s like finding a needle in a haystack to choose the right altcoin.
Why is altcoin season absent in 2024?
The absence of altcoin season this year is the result of multiple intertwined factors.
Firstly, there is a lack of new narratives. Behind every bull market, there is a strong narrative driving it. For example, in 2017, it was the first wave of token issuance, and in 2021, it was supported by emerging concepts such as DeFi, NFT, and GameFi. However, this year, although there are many new projects in the crypto market, most of them are just old wine in new bottles, repeating what already exists. There is a lack of compelling new narratives to attract funds and drive a major market trend.
Secondly, there is token dilution. In this cycle, there are a large number of high-market-cap, low-circulating-supply tokens being launched. Data shows that the average circulation rate of these projects is only 14%, and there are about $90 billion worth of tokens waiting to be unlocked. When projects become oversaturated and token supply exceeds demand, it becomes difficult for altcoin season to continue.
Another important factor is the emergence of Bitcoin spot ETF, which has changed the flow of funds. Previously, most investors accessed Bitcoin through centralized exchanges (CEX), and these investors often tried out altcoins, driving the prosperity of the altcoin market. However, the approval of ETF has attracted a large amount of institutional funds, which are only interested in Bitcoin. This structural change in institutional funds weakens the market demand for altcoins and breaks the traditional flow of funds.
Additionally, macroeconomic uncertainty has intensified the market’s conservative sentiment. The global economic outlook is worrisome, and investors become more cautious in this environment. Altcoins, with their high volatility and higher risks, appear weak in this risk-averse atmosphere.
What should be the next step?
The direction of the crypto market is filled with uncertainty. If the interest rate policy stabilizes the economy in the future, investors’ risk appetite may rebound, and Bitcoin’s dominant position in the market may be challenged. Funds may flow more freely into other high-quality assets, including some promising altcoins. However, if recession concerns continue to intensify, Bitcoin’s position as a safe-haven asset will be further consolidated, and its market dominance will remain high.
However, regardless of the situation, an indisputable fact is that the differentiation among altcoins will intensify. High-quality projects will stand out with their unique technological advantages, application scenarios, and market potential, while poor-quality projects may struggle and gradually be eliminated by the market.
In the face of such a complex and ever-changing market environment, blind operations undoubtedly greatly increase investment risks. For ordinary investors, there is no need to limit themselves to altcoin opportunities. It may be worthwhile to consider looking at more stable products and seeking certainty amidst uncertainty. For example, 4E Finance offers investment products with a USDT annualized yield of up to 5.5%, with flexible options for current or fixed-term investments. With these options, funds are not idle and can wait for market changes while having the flexibility to invest.
Of course, diversified asset allocation helps to withstand the volatility risks of a single market and allows investors to focus on investment opportunities in other areas during this challenging time. For example, 4E also supports traditional financial market assets such as stocks, indices, foreign exchange, and gold, providing more stable growth opportunities.
In conclusion, whether altcoin season will come in 2024 is still unknown. In the ever-evolving crypto market, market patterns are no longer as reliable as they used to be. Facing a complex and ever-changing market, investors should remain cautious, diversify risks reasonably, and not rely solely on past experiences. Instead, they should seek stable growth opportunities through diversified investments.
