CryptoQuant CEO Ki Young Ju explains that the delay in altseason is due to the dominance of institutional investors and spot Bitcoin ETFs, which typically don’t rotate their capital into altcoins.
Although altcoins have shown major strength this year in 2024, the altseason is yet to begin to trigger a mega rally in this sector. CryptoQuant CEO Ki Young Ju shares insights on the reasons behind this delay in the altseason, adding that it should break free from the Bitcoin price BTC $104 277 24h volatility: 0.9% Market cap: $2.07 T Vol. 24h: $16.32 B movement and the BTC market dominance.
Ju noted that unlike the previous cycles, the key factors contributing to the current BTC price rally include participation by institutional investors and spot ETFs, rather than retail traders on crypto exchanges.
Ju noted that institutional investors and ETF buyers typically do not rotate their assets from Bitcoin to altcoins. Moreover, as they operate outside of crypto exchanges, it becomes difficult for them to shift funds between Bitcoin and altcoins via OTC trades.
While some institutional investments may flow into major altcoins through ETFs or other vehicles, smaller altcoins still rely heavily on crypto exchange users for capital, he added.
Altcoins Rely on Fresh Capital on Crypto Exchanges
For altcoins to reach new all-time high market capitalizations, Ju explained, a significant influx of fresh capital is needed on exchanges. However, the current altcoin market cap remains below its previous all-time high showing a lack of new liquidity from exchange users.
Ju also suggested that if retail investors return to Bitcoin, this could reignite exchange user activity and potentially trigger an altcoin season. However, he emphasized that future Bitcoin growth is likely to come from institutional investments, ETFs, and possibly government involvement, rather than from retail traders.
In conclusion, Ju also added that altcoins should focus on developing independent strategies to attract new capital, rather than relying on Bitcoin’s momentum to drive their growth.
Bitcoin Dominance Peaking, When Will Altseason Begin?
Crypto market analysts predict that Bitcoin’s dominance in the crypto market is peaking and the capital rotation into altcoins will begin soon. This could lead to a probable altseason along with the Ethereum price hitting an all-time high.
#Bitcoin reaching the green line means it has expanded to the extent where its market cap begins to rotate substantially into #altcoins.
It’s the signal that fires every 4 years prior to the macro decline in Bitcoin dominance known around here as “altseason”. pic.twitter.com/2FAdPxbMnK
— TechDev (@TechDev_52) November 27, 2024
The Total3 Index, which tracks the market capitalization of cryptocurrencies excluding Bitcoin (BTC) and Ethereum ETH $2 510 24h volatility: 0.6% Market cap: $303.12 B Vol. 24h: $10.53 B , has experienced a significant rally over the past three weeks, reaching levels not seen in three years. This surge is fueling speculation that an altcoin season may be underway.
Last week, the Total3 Index hit new cycle highs, marking its largest move since April 2021, with a 23.2% surge. The total market capitalization of these assets is approaching its May 2021 high of $984 billion.
As per the latest Bitfinex Alpha report there’s a notable strength. Bitfinex analysts suggest that the recent rally in the altcoin market is due to ongoing developments in the regulatory landscape.
“We have moved past the April 2022 high for altcoins, which was widely regarded as the “start of the bear marketˮ, after which the next impulse down formed the 2022 bear market lows for altcoins. We believe an ascent past these levels indicates the rotation of speculative capital and interest from Bitcoin into altcoins as retail market participation increases,” the report notes.
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