Bitcoin hits a record high, but the altcoin market has not been very good. Looking at the altcoins in my hands, they have basically not moved, and some are even going down. This is the most complained problem of retail investors. Today, I will sort it out for everyone:
The current liquidity in the currency circle is tight, funds are highly concentrated, and large funds only focus on the "big brother" (BTC) and avoid the "little brother" (altcoins)
Because the big brother has strong consensus, institutional preference (especially Bitcoin ETF introduces "regular army" funds), risk resistance, and good liquidity.
Impact of Bitcoin ETF: It is a game changer, attracting a huge amount of conservative institutional funds, but almost only flows to BTC (and part of ETH), exacerbating differentiation.
Dilemma of altcoins:
High policy risk: Unclear supervision (especially for securities-like coins), cautious exchanges, and concerns about funds. There are many "air" projects, and a large number of projects without substance left over from the last bull market cannot survive in the current recovery. The project parties themselves lack confidence (cash out and buy BTC for risk hedging).
Funding gap: Liquidity is absorbed by BTC/ETH, and altcoins generally lose blood. The current market is a structural bull market (cautious bull market), not a general rise.
The capital gap is obvious (dominated by BTC/ETH) and the market is maturing. It is a good thing to eliminate the purely hyped "air projects".
Therefore, in the face of market conditions, we must recognize the essence, understand the logic of capital, be highly vigilant against altcoins, and only pay attention to a very small number of truly valuable targets, or lower your pattern. Patience and vision are more important than boldness.
