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BitEagle News
--
WEN ALTSEASON?
80% of profits are made in the last 20% of the cycle.
Learn how to recognize an alteason and make the most out of it.
What triggers an altseason is not the percentage return of $BTC but its wealth effect. And since September 2023, Bitcoin's market cap has grown by $941 billion.
Almost 1 trillion dollars.
• $1 trillion is roughly the size of the entire economy of Saudi Arabia, Netherlands, or Switzerland.
• $1 trillion is 2.89% of United States national debt.
• $1 trillion is 2.5% of the S&P500 total market cap.
• $1 trillion is bigger than almost all Sovereign Wealth Funds.
Given that most altcoins are relatively small in size, it will not take much of this wealth to significantly increase their price.
The whole altcoins market cap, excluding ETH and major stablecoins, is currently $588 billion.
So, when will this happen?
Probably, once $IBIT, $FBTC, $ARKB, and all other Bitcoin ETFs are at 100%+ from their launch price.
Rarely in the past tradFi investors had the opportunity to double their investment in a matter of a few months.
Bitcoin's big gains will boost their ego and confidence, pushing them to start exploring other coins. It's like making money in big companies and then taking a chance on smaller startups.
• Wealth Effect - As people experience gains in their wealth, they may feel more financially secure and confident. This increased sense of wealth can lead to a willingness to take on more risk and pursue higher returns.
• Overconfidence Bias - As investors experience success in one area of the market, they may become overconfident in their abilities to predict future market movements or identify lucrative investment opportunities.
• Recency Bias - If an investor has recently experienced significant gains, they may extrapolate this success to other areas of the market or investment opportunities without fully considering the inherent risks or differences in asset classes.
Whether it's the wealth effect, these biases, or all of them, we'll soon see a flywheel bigger than what we experienced in the previous cycles.
The percentage increase might be smaller this cycle, but the dollar scale is exponentially higher.
It took 57 days for the ETFs to be up 50% from launch. At $93,000, day-1 buyers will be up 100%.
At $72,900 and $97,100, the huge inflows between the 8th and 16th of February ($7.16 billion) will be up respectively 50% and 100%
At $85,700 and $114,600, those who entered between the 26th and 28th of February ($1.77 billion of inflows) will be up 50% and 100%.
It's good to keep them as a reference because this is what wealth effect is which leads to more risk taking.
What we need to keep an eye on are CEX inflows/outflows. Since 11 January, these were the inflows of the three most utilized CEXs:
• OKX - $1 billion of inflows
• Robinhood - $263 million of inflows
• Binance - $247 million of inflows
— Data from Defillama —
In the meantime, the cumulative inflow for ETFs reached $10+ billion.
It's clear that ETFs are the new preferred way to buy and hold $BTC.
On the other hand, no ETFs exist for altcoins (it can change). CEXs first and DeFi afterward are the only ways to get exposure to them.
CEXs inflows increasing = investors looking to buy altcoins.
Another way to look at it is by comparing the growth of stablecoins market cap and TOTAL2.
April 2021 - April 2022
• Stablecoins Market Cap: +$125 billion
• TOTAL2 Market Cap: +$430 billion
October 2023 - March 2024
• Stablecoins Market Cap: +$21 billion
• TOTAL2 Market Cap: +$707 billion
Money isn't entering the market as in the previous years.
Is this cycle different?
No. Simply, there is a step more to enter the market.
We passed from
CEXs → DEXs
to
ETFs → CEXs → DEXs
But, this additional step will push into CEXs hundreds of billions of inflows.
It only requires some patience.
Where are we heading?
If we have the same patterns as the previous cycle, we'll see a ~38% dominance for alts (excluding BTC - ETH - USDT - USDC - DAI) at the top.
With an overall $7.8 trillion crypto market cap, the market cap for alts would be around $2.96 trillion.
A 5.1x from where we stand right now.
The final stages will come when flows into CEXs/DeFi are at par or even higher than ETF ones.
'Impatience with actions, patience with results'
- Naval.
#Altseason #BitEagleNews
Learn how to recognize an alteason and make the most out of it.
What triggers an altseason is not the percentage return of $BTC but its wealth effect. And since September 2023, Bitcoin's market cap has grown by $941 billion.
Almost 1 trillion dollars.
• $1 trillion is roughly the size of the entire economy of Saudi Arabia, Netherlands, or Switzerland.
• $1 trillion is 2.89% of United States national debt.
• $1 trillion is 2.5% of the S&P500 total market cap.
• $1 trillion is bigger than almost all Sovereign Wealth Funds.
Given that most altcoins are relatively small in size, it will not take much of this wealth to significantly increase their price.
The whole altcoins market cap, excluding ETH and major stablecoins, is currently $588 billion.
So, when will this happen?
Probably, once $IBIT, $FBTC, $ARKB, and all other Bitcoin ETFs are at 100%+ from their launch price.
Rarely in the past tradFi investors had the opportunity to double their investment in a matter of a few months.
Bitcoin's big gains will boost their ego and confidence, pushing them to start exploring other coins. It's like making money in big companies and then taking a chance on smaller startups.
• Wealth Effect - As people experience gains in their wealth, they may feel more financially secure and confident. This increased sense of wealth can lead to a willingness to take on more risk and pursue higher returns.
• Overconfidence Bias - As investors experience success in one area of the market, they may become overconfident in their abilities to predict future market movements or identify lucrative investment opportunities.
• Recency Bias - If an investor has recently experienced significant gains, they may extrapolate this success to other areas of the market or investment opportunities without fully considering the inherent risks or differences in asset classes.
Whether it's the wealth effect, these biases, or all of them, we'll soon see a flywheel bigger than what we experienced in the previous cycles.
The percentage increase might be smaller this cycle, but the dollar scale is exponentially higher.
It took 57 days for the ETFs to be up 50% from launch. At $93,000, day-1 buyers will be up 100%.
At $72,900 and $97,100, the huge inflows between the 8th and 16th of February ($7.16 billion) will be up respectively 50% and 100%
At $85,700 and $114,600, those who entered between the 26th and 28th of February ($1.77 billion of inflows) will be up 50% and 100%.
It's good to keep them as a reference because this is what wealth effect is which leads to more risk taking.
What we need to keep an eye on are CEX inflows/outflows. Since 11 January, these were the inflows of the three most utilized CEXs:
• OKX - $1 billion of inflows
• Robinhood - $263 million of inflows
• Binance - $247 million of inflows
— Data from Defillama —
In the meantime, the cumulative inflow for ETFs reached $10+ billion.
It's clear that ETFs are the new preferred way to buy and hold $BTC.
On the other hand, no ETFs exist for altcoins (it can change). CEXs first and DeFi afterward are the only ways to get exposure to them.
CEXs inflows increasing = investors looking to buy altcoins.
Another way to look at it is by comparing the growth of stablecoins market cap and TOTAL2.
April 2021 - April 2022
• Stablecoins Market Cap: +$125 billion
• TOTAL2 Market Cap: +$430 billion
October 2023 - March 2024
• Stablecoins Market Cap: +$21 billion
• TOTAL2 Market Cap: +$707 billion
Money isn't entering the market as in the previous years.
Is this cycle different?
No. Simply, there is a step more to enter the market.
We passed from
CEXs → DEXs
to
ETFs → CEXs → DEXs
But, this additional step will push into CEXs hundreds of billions of inflows.
It only requires some patience.
Where are we heading?
If we have the same patterns as the previous cycle, we'll see a ~38% dominance for alts (excluding BTC - ETH - USDT - USDC - DAI) at the top.
With an overall $7.8 trillion crypto market cap, the market cap for alts would be around $2.96 trillion.
A 5.1x from where we stand right now.
The final stages will come when flows into CEXs/DeFi are at par or even higher than ETF ones.
'Impatience with actions, patience with results'
- Naval.
#Altseason #BitEagleNews
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.