Crypto analysts suggest that the high-risk, high-reward nature of altcoins may no longer hold true as weak narratives hinder the potential for big gains in the crypto market. Markus Thielen, the head of research at 10x Research, believes that the era of 100x returns may be behind us, despite expectations of an altcoin bull market in 2024. Thielen points out that the current market lacks retail participation and compelling new projects to attract non-crypto traders. Additionally, he notes that previous altcoin bull markets had stronger narratives and greater capital investment, while the current cycle lacks substantial backing for its shorter-lived narratives.
A recent example of the unpredictable altcoin market is the Solana-based memecoin GameStop (GME), which saw a 2,727% increase in value alongside the spike in GameStop’s stock price. However, Michael van de Poppe, the founder of MN trading consultancy, warns that holding a portfolio mainly consisting of altcoins carries a significant risk. Despite this risk, van de Poppe recently sold all his Bitcoin (BTC) to invest in altcoins, acknowledging the potential for a 50-80% loss.
On the other hand, crypto investor Fabio Andreatta is doubtful that an “altseason” will even occur. He believes that investing in altcoins only increases the risk and that most altcoins will never reach their all-time highs again.
Bitcoin’s dominance in the crypto market, measured by its market share relative to other cryptocurrencies, suggests that capital has shifted away from altcoins. Bitcoin dominance is currently at 56.05%, nearing its year-to-date all-time high.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.