Author: Ciaran Lyons, CoinTelegraph; Translated by: Deng Tong, Jinse Finance
Crypto analysts say the high-risk, high-reward thesis for Altcoin may lean towards the former, as the weak narrative driving the crypto market makes big gains unlikely now.
“While tactical opportunities exist, the era of 100x returns may be over,” said Markus Thielen, head of research at 10xResearch.
He warned that with the market anticipating an Altcoin bull run this year, “retail participation remains sluggish, and few new projects are emerging that can attract non-crypto native traders.”
Thielen said past Altcoin bull runs had “unique characteristics” that attracted more money, but this cycle has seen “tighter capital, as evidenced by lower total value locked and a lack of venture capital investment.”
“In the last cycle, the narrative that cryptocurrencies could replace the traditional financial system was widely accepted, but this cycle’s view is that many cryptocurrencies are short-lived and lack substantive support,” Thielen added.
Earlier this week, after trader Keith Gill first posted the meme from his “Roaring Kitty” X account, Solana-based memecoin GameStop (GME), which has no affiliation with the video game sales company, rose 2.727% as GameStop shares surged over the nearly three-year period.
GameStop briefly surged 2.727% as its stock price rose. Source: CoinMarketCap
Michael van de Poppe, founder of MN Trading Consulting, claimed in a May 16 post that a portfolio holding mostly Altcoin carries “relatively large” risks.
“What are the downsides to this bet? Relatively speaking it is quite large. At the time of posting, my overall investment is already down about 20% in 1-2 weeks.”
Despite the risks, van de Poppe explained that he recently sold all of his Bitcoin and moved into Altcoin, claiming that he “could lose 50-80%.”
However, cryptocurrency investor Fabio Andreatta is skeptical that an “Altcoin season” will occur.
“All you’re doing is increasing your risk,” Andreatta said in response to van de Poppe’s X post. “It’s unlikely that Altcoin will surpass Bitcoin. Most Altcoin will never reach their ATHs again.”
Bitcoin’s dominance (market share relative to the rest of the cryptocurrency market) suggests that the broader market has been shifting capital away from Altcoin.
According to TradingView data, Bitcoin dominance is close to its all-time high so far this year, currently at 56.05%, up 2.12% over the past seven days.
