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The current global cryptocurrency market capitalization is $3.2 trillion, with a 2.42% change in the past 24 hours and a 120.08% change in the past year. As of today, the market capitalization of Bitcoin (BTC) is $1.8 trillion, with a Bitcoin dominance of 57.34%. At the same time, the market capitalization of stablecoins is $185.9 billion, accounting for 5.88% of the total cryptocurrency market capitalization. On November 12, Bitcoin reached a new high of $93,625, and the total cryptocurrency market capitalization reached $3.2 trillion, both breaking historical highs. This round has only seen the frenzy of Bitcoin and meme coins, with Altcoins completely failing to keep up with the surge.
The reasons for the sluggish performance of Altcoins are roughly as follows:
- The market does not buy into the token economic model of new projects with low MC and high FDV, and instead invests in meme coins
- There has been no killer application this round
The following chart shows the market share percentage of Bitcoin compared to the other top 10 cryptocurrencies.
The logic of Altcoin price increase
In the current early stage of the interest rate cut cycle, the United States has released a large amount of liquidity into the risk market. The flow of these funds has a directionality, flowing from the traditional real estate market to the stock market, and then to mainstream cryptocurrencies (such as BTC, ETH and SOL). When the market capitalization of these mainstream cryptocurrencies reaches a certain height, the excess liquidity will flow into the Altcoin market with smaller market capitalization. It's like water overflowing from a large to small basin, and the Altcoin market is like the last basin, when there is enough capital, it will overflow into this market, thereby driving up the prices of Altcoins.
The prerequisite for the rise of Altcoins is the market performance of mainstream cryptocurrencies such as Bitcoin. Usually, when mainstream cryptocurrencies like Bitcoin rise to a certain extent, capital will start to look for higher-risk and lower-liquidity assets, and Altcoins become their target.
Therefore, the prerequisite for the rise of Altcoins is: Bitcoin must rise first, until it can't rise anymore, and capital is willing to leave Bitcoin and buy Altcoins.
Current market cycle: on the eve of Altcoin explosion
From the market cycle this year, the Altcoin market has already gone through the most depressed period. From April to September, the overall Altcoin market capitalization experienced a significant decline, but since September, the market capitalization has started to stabilize and rebound. This indicates that we have entered the eve of the Altcoin market explosion.
Currently, the upward momentum of Bitcoin is very obvious, which suggests that capital may flow out of mainstream cryptocurrencies and into the Altcoin market. Based on historical experience, when BTC.D (Bitcoin's share of the total market capitalization) reaches a certain high level, the Altcoin season will be triggered. And now, BTC.D is approaching a historical high, indicating that we are in the early stage of the Altcoin season.
The current overall cryptocurrency market capitalization is about $3.2 trillion. If the BTC.D drops from 61% to 50% while the total market capitalization remains unchanged, it is estimated that $320 billion in liquidity will be injected into the Altcoin market, which also means that Total 2 (excluding Bitcoin market capitalization) will grow by 28%!
(*Calculation formula: [3.2T*(61-50%)] / [3.2T*(1-61%)] = 28%)
