Altcoins have a ‘relatively large’ risk as the days of big profits are over, say analysts
The high-risk, high-reward theory of altcoins may be skewed to the former, as large profits are now underwhelming due to the weak narratives driving the crypto market, crypto analysts say.
“Despite the tactical opportunities, the era of 100x returns may be behind us,” 10x head of research Markus Thielen told Cointelegraph.
Although the market expects an altcoin bull market this year, he warned that “retail participation is still subdued and few new projects have emerged – non-crypto-native traders”.
Thielen says past altcoin bull markets have had “distinctive characteristics” that have attracted more money, but this cycle has seen tight capital, locked in by low overall value and a lack of venture capital investments.
“Last cycle, the narrative that crypto could replace traditional financial systems was widely accepted, but the narratives of this cycle were short-lived and lacked support,” Thielen added.
Earlier this week, Solana-based memecoin GameStop ( GME ) — no relation to the video game retailer — surged 2,727% with GameStop's stock price up 2,727% after trader Keith Gill first posted a note on his “Roaring Kitty” X account in three sessions. in years.
In a May 16 post, Michael Van de Pop, founder of MN Business Consulting, said a portfolio consisting primarily of altcoins has “relatively large” risk.
“What's the downside of this bet? It is relatively huge. At the time of posting, it is already down 20% in 1-2 weeks on total investment.
Despite the crash, Van de Pop said he sold all of his Bitcoin (BTC) to altcoins, saying he “could lose 50-80%.”
However, crypto investor Fabio Andretta is skeptical that an “Altesseson” even exists.
Related: Altcoins lower in early summer before bull run – analyst
“All you've done is raise your risk,” Andreatta replied to Van de Pop's X-Post. “You can't beat Bitcoin. Most altcoins will never reach their ATHs again.
Bitcoin's dominance – its market share relative to the rest of the crypto market – indicates that the broader market has shifted away from altcoin capital.
According to TradingView data, Bitcoin's dominance is at an all-time high year-to-date, currently at 56.05%, up 2.12% over the past 7 days.
Magazine: Buy altcoins now, but sell before mid-2025: Charles Edwards, X Flame Hall
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
