This is a new alternate season – at least according to some crypto industry commentators. Over the past month, prices for all currencies, also known as non-bitcoin (BTC) cryptocurrencies, have risen as projects such as Solana, Cardano, and Polkadot have tripled the value of tokens. Although people shout “alternative season” with the famous, the industry is still exploring uncharted territory.
The Cointelegraph Markets Pro Alternate Season Indicator shows the industry is in the middle of an alternate season, showing a skew of 32%. While the Altseason Index, which defines an alternate season as a 90-day period in which 75% of the top 50 altcoins outperform bitcoins, says it is not an alternate season yet. But if the last few weeks go by, then the altcoin market is just getting started and has already proven its desire to impress.
One theory behind the upcoming alternate season is that the general sentiment around bitcoin has turned solid. The Bitcoin outflow is funding several altcoin projects, resulting in the recently issued tokens showing impressive growth. But can the story be much broader?
Is there an alternate season?
Alternate seasons can be both good and bad for the cryptocurrency economy, and be a kind of inevitable evil in space. On the other hand, it is a sign of health, which indicates that new money is coming into the market, which is causing a rise in value. However, after a while, speculation tends to exceed the usefulness of these tokens, causing sharp corrections in the market and large losses for speculators.
In recent years, the cryptocurrency and digital real estate space has grown exponentially, but according to Hunain Nasir, chief analyst at OKEx Insights, there is little new this time around. “We see how Ethereum breaks out to BTC and begins to outperform the market leader. The same has happened in previous alternate seasons, “he said, adding,” ETH is holding a market meeting and as long as it is strong, the trend may continue until the end of the year. ”
The latest altcoin rally was driven by a variety of factors, including the latest nonperishable token boom (especially in August), which confirmed the market’s belief in the speculative value of digital assets, Nasir said. The recent storm of positive news has sparked renewed optimism in the market with the announcement of the London Ethereum hard fork, the launch of smart contracts in Cardano and bridging in Cosmos.
The move away from more traditional “premium” investments in space like Bitcoin and Ethereum may also reflect the current market attitude towards risk, which means that investors are increasing their risk tolerance due to the prospect of a more dynamic market. Altcoins are naturally more volatile than bitcoins due to their lower market value and lower liquidity, but while this means they can quickly render investments worthless, they also have the potential for huge returns.
The market value of the stablecoin surged from $ 36 billion in January to over $ 115 billion in mid-September, with the supply of Tether (USDT) tripling over that period. Stablecoins, but not exactly altcoins, have become the primary medium of value transmission on blockchain networks, and this expansion is a worthy representation of the growing DeFi effect on the site.
A well-diversified portfolio can protect investors from risk while ensuring that they participate in some of the bullish moves. This makes universal coins in general something attractive as an investment grade, but all the money has to come from somewhere. With the rise in inflows of all fiat currencies, there may be large reserves on bitcoins, but institutions seem to be more optimistic about bitcoins than ever before.
Bitcoin is not going to crash – it just lags behind in performance, according to Rachel Lane, co-founder and CEO of the decentralized derivatives exchange SynFutures: “I expect the overall cryptocurrency market to continue its upward trend in the coming months, especially as the Fed continues to invest legitimate funds. as well as new institutional investors to the market ”.
Neither Bitcoin nor Altcoin
One of the main differences between previous alternate seasons is how widespread Ether (ETH) is. At the beginning of the year, Bitcoin accounted for almost 70% of the market value of the cryptocurrency, while Ether was less than 13%. As of Thursday, Ether accounts for nearly 19% of the market, while Bitcoin’s dominance has dropped to less than 41%.
DeFi has attracted more institutional investors to the room than ever before, and this is gradually bringing more legitimacy and awareness to the room.