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Altcoins Struggle in Current Cycle, But Analysts Predict Future Growth Potential

28.11.2024 13:00 1 min. read Kosta Gushterov
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Altcoins Struggle in Current Cycle, But Analysts Predict Future Growth Potential

Altcoins have struggled to perform as expected in the current market cycle, raising questions about whether this period will follow the traditional altseason pattern.

Typically, Bitcoin (BTC) leads the market, with capital flowing into altcoins, driving their outperformance and reducing Bitcoin’s dominance. However, this cycle has seen Bitcoin holding a stronger position.

Ki Young Ju, CEO of CryptoQuant, explained that altcoins are lagging behind Bitcoin’s market cap due to a shift in capital flow. More demand for Bitcoin is coming from derivatives like futures and ETFs rather than spot exchanges. This change has reduced the liquidity entering the altcoin market, and for altcoins to reach new highs, they’ll need a substantial influx of fresh capital from crypto exchanges.

The rise of institutional products, such as ETFs and MicroStrategy’s Bitcoin strategy, has further altered investor behavior. Institutional investors are more focused on Bitcoin, with little interest in altcoins, leaving minor altcoins reliant on exchange users for demand.

To succeed, altcoins need to develop independent strategies to attract new capital, rather than depending on Bitcoin’s movements. While some analysts remain skeptical, others, like TechDev, see signs of an impending altseason, noting that the current market resembles patterns from previous cycles. Optimists like Alex Svanevik predict a major bull market in 2025, while others, like Alex Becker, see utility altcoins as having the most growth potential this cycle.

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.

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