Not afraid of a big drop?

$FIL Recently, the cryptocurrency market is quietly brewing a transformation. Multiple signs indicate that a season of "altcoin" rallies, potentially surpassing mainstream tokens like DOT and FIL, is about to arrive. This is not baseless but is based on actual observations of capital flow both within and outside the market.

It is reported that some forward-looking institutional investors and participants in traditional financial markets have begun to position themselves in altcoins at low levels. Their actions reveal a clear signal: when Ethereum (ETH) begins to rise strongly, a significant amount of capital from the traditional financial market is likely to flood into the crypto domain, triggering a liquidity spillover effect. In this scenario, altcoins with real ecosystems may replicate the crazy growth seen in 2021.

Notably, investors from the traditional financial sector are turning their attention to the crypto market. Private equity funds and U.S. stock traders have disclosed that they have allocated 5% to 10% of their portfolios to altcoins that have fallen over 80% and possess real ecosystems. There are two key considerations behind this decision:

First is the return potential. Compared to small-cap stocks in the U.S. market, many altcoins have dropped 90% from their 2021 peaks, with current market capitalizations of only tens of millions of dollars. If the crypto market overall rebounds, the upside potential for these tokens could exceed that of U.S. stocks by more than 10 times.

Second are the liquidity indicators. Investors have noted that the transaction volume on the Ethereum network is increasing, and altcoin trading pairs on decentralized exchanges like Uniswap are becoming more active. These are seen as precursors to a large-scale influx of capital, similar to the market performance of altcoins before the season in 2021.

However, investors must remain cautious. While the market shows positive signals, the high volatility of cryptocurrencies and regulatory uncertainties still exist. It is crucial to conduct in-depth research on the fundamentals of the projects and market dynamics before participating in any investment.