1. Changes among major players
From 2017 to 2020, the main players in the cryptocurrency market were individuals and mining companies, but now it is different; giants like BlackRock and Fidelity have entered the arena, and the market has directly escalated to a new level. Institutions prioritize risk control and stability, and with large capital, they will only choose major coins like BTC, ETH, and SOL, aiming to hedge against inflation while also making profits.
So the current market structure is — institutions dominate BTC's long bull and slow bull, while altcoin trends will only appear in certain sectors. Overall, most altcoins cannot outperform BTC at all!
2. Too many altcoins + tightening regulations
There are currently too many altcoins; there simply isn't enough money in the market for so many altcoins to rise together, let alone experience exponential growth of dozens or hundreds of times. The difficulty of picking out altcoins among thousands that have funds willing to push them is too high!
Moreover, U.S. regulations are becoming increasingly strict, and the issuers of altcoins will face tighter controls, and the methods of pushing prices will also be restricted. Many projects list on exchanges just to cash out and leave, so they won't provide retail investors with opportunities for exponential gains! Relying on betting on one skyrocketing coin among thousands of altcoins is too risky; random operations can lead to losses that leave you with nothing.
3. The impact of the macro economy
During the pandemic from 2020 to 2021, countries engaged in massive monetary easing, especially the Federal Reserve which directly lowered interest rates to 0%. There was an abundance of money in the market, and many people were willing to enter the market to trade cryptocurrencies, leading to various coins in the crypto space rising.
But from 2024 to 2026, the Federal Reserve's interest rate target is 3%-4%, and the lack of money in the market will not change, fundamentally incomparable to 2021. Coupled with institutional dominance in the market, a large amount of funds are flowing into BTC, leaving even less capital for altcoin rallies.
To summarize:
In this round of the bull market, capital is already limited. BTC is the focus, and mainstream coins and potential altcoins like ETH, SOL, XRP, DOGE, LTC, AAVE, LINK, and ENA can be allocated appropriately. As for small-cap altcoins, risking 10% of your position can be acceptable, but never go all-in, or you will likely get harvested!
