Compared to Bitcoin, altcoins are having an even tougher time. Although some tokens like SOL and TON have performed well this year, the altcoin market as a whole has not experienced the widespread gains seen in previous bull markets. Most altcoins have struggled to keep up with Bitcoin. According to CoinGecko data, the market cap of altcoins has increased by approximately $72.8 billion this year, representing an 8% rise. In contrast, Bitcoin’s market cap has grown by $368.2 billion, an impressive 44.5% increase.
According to previous experiences, altcoins have been expected to follow Bitcoin into a bull market and outperform it in terms of growth. However, this year, the much-anticipated altcoin season has not materialized. Based on the crypto market’s four-year cycle pattern, we can expect a larger bull market next year, but will altcoins still meet investors’ expectations by then?
Several prominent figures in the crypto space have recently shared their views on the altcoin market. On August 4th, Markus Thielen, founder of 10x Research, expressed a bearish outlook on altcoins in his article. “Larger players have sold altcoins and shifted their funds into Bitcoin.” he wrote. “Given the billions of unlocks observed in recent weeks, other players will likely adopt this strategy in 2024. Consequently, many altcoins are expected to experience significant declines. We have been very bearish about altcoins, especially Ethereum.”
Andrew Kang, co-founder of Mechanism Capital, is also not optimistic about the short-term prospects for altcoins. In July, he stated, “I believe 98%+ of altcoins topped for the cycle except for maybe a handful of coins that may make some new highs in Q4 2024/Q1 2025″ In his view, a majority of the coins that may set new highs are likely to be meme coins. However, picking the right ones from the “hundred of thounsands” of meme coins is clearly not an easy task.
At the same time, a number of industry veterans believe that an altcoin bull market will eventually return, albeit under certain conditions. BitMEX co-founder Arthur Hayes shared his perspective in his latest article this week. “Shitcoins are higher beta Bitcoin crypto plays. But during this cycle, Bitcoin and now Ether have structural bids in the form of net inflows into US-listed exchange-traded funds (ETF). While Bitcoin and Ether have corrected since April, they escaped the carnage experienced in the shitcoin markets. Alt szn will return only after Bitcoin and Ether decidedly break through $70,000 and $4,000, respectively. ”he added. “The combination of a dollar liquidity-inspired Bitcoin and Ether rally into year-end will create a strong foundation for the return of a sexy shitcoin soiree.”
During the launch ceremony for HTX’s 11th anniversary last week, HTX Global Advisory Board member Justin Sun also discussed altcoins. He stated that in the next bull market, quality altcoins will rise and may even outperform Bitcoin. However, given the sheer number of assets currently available, with liquidity not matching the total asset volume, it’s unlikely that we will see the same broad-based gains as before. Promising altcoins may fall into two categories: secondary mainstream coins outside of Bitcoin and Ethereum, such as TRX, SOL, and DOGE, and new tokens with novel concepts or narratives.
Clearly, the consensus within the industry is that in the next bull market, only a portion—perhaps even a small portion—of altcoins will generate wealth. For investors, DYOR (Do Your Own Research) will be crucial. Before the altcoin season truly returns, managing risk in the current subdued market is likely to be the top priority.
Note: This article does not constitute investment advice.
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