Bitcoin soars 100%, why are altcoins collectively lying flat?
To be honest, the most awkward situation in the market right now is for altcoin players. Watching Bitcoin continuously refresh historical highs while the altcoins they hold are nailed to the floor—where's the so-called 'altcoin season'? The data doesn't lie: Bitcoin's market cap firmly sits at over 60%, ETF funds are pouring in madly, while more than 15,000 altcoins are fighting over the scraps. This situation is off. Bitcoin is feasting, and altcoins can't even get a taste of the soup? I dare say this time it's not that retail investors lack vision. BlackRock and others are voting with real money, elevating Bitcoin to be the 'safe-haven asset' of the crypto world. Bitcoin ETFs have attracted over $20 billion this year, while altcoin ETFs? They haven't even touched the door. What's worse is that the halving market in 2024 has directly drained market liquidity—capital is all focused on the 'scarcity' story of Bitcoin, who has time to pay attention to altcoins? Federal Reserve: Don't forget the macro environment is the invisible killer of altcoins! The altcoin frenzy in 2020 relied on the Federal Reserve's crazy money printing. What about now? Quantitative tightening (QT) is causing market funds to evaporate at a rate of $95 billion per month. Without liquidity, even the best projects can't take off. Even more frustrating is that interest rate cut expectations keep falling through, and institutional investors are clutching cash tightly. There are too many altcoins, and not enough retail investors. The most absurd scene in the crypto market now: dozens of new projects emerge every day, but the total market cap is still less than half of Bitcoin's. Capital is scattered like pepper, and even the top projects are starving. What's worse, venture capital investment in altcoins has plummeted by 75%, new projects lack funds for development, and old projects have no money for marketing, plunging the entire ecosystem into a vicious cycle. Retail investors are scared of getting cut, and institutions are afraid to touch it. The lessons from the 2022 LUNA collapse and FTX debacle are too profound. Now retail investors would rather chase Bitcoin's rise than touch the 'hundredfold coin' myth. On social media, discussions about Dogecoin and SHIB have plummeted—without FOMO sentiment, altcoins feel like they've been pulled off life support. With regulatory pressure looming, who dares to act rashly? The Trump administration publicly claims to support crypto, but the approval of altcoin ETFs has been stalled for two years. What's even worse is that the SEC defines 90% of altcoins as 'securities,' and compliance costs directly deter institutions. DeFi protocols worry daily about being hit by regulatory fists; under such circumstances, who dares to build positions on a large scale? Will history repeat itself? Patience is more precious than gold. Old investors remember: the altcoin season in 2017 exploded after Bitcoin peaked, and in 2021, altcoins went wild after Ethereum led the way. Now Bitcoin is still hitting new highs, but the Ethereum/Bitcoin exchange rate has dropped back to 2018 levels. But don't forget, market cycles have never failed. When Bitcoin's momentum slows, when the Federal Reserve truly pivots, and when a phenomenal altcoin ignites sentiment—perhaps the madness belonging to altcoins is just around the corner.
Perhaps only after the Federal Reserve lowers interest rates can altcoins regain their vitality.