Altcoins

This is the biggest problem with Altcoins this cycle: Crypto Analyst

Published

7 months ago

19 June, 2024

In a thread on Speaking to his many followers, Deutscher explained the impact of the rapid increase in the number of new crypto tokens, an issue he believes is at the heart of altcoins’ underperformance during this cycle.

The proliferation of crypto

Since April 2024, the crypto landscape has witnessed the introduction of over a million new crypto tokens, with a notable half being memecoins created primarily on the Solana network. According to Deutscher, the ease of deploying these tokens on-chain contributes to an inflated number of tokens, but highlights a deeper problem of market saturation and dilution.

Deutscher elaborates: “We now have 5.7 times more crypto tokens than during the bullish peak of 2021. This is one of the main reasons why crypto has struggled this year, although Bitcoin has reached new all-time highs. He compares the excessive issuance of new tokens to inflation, where “the more tokens launched, the greater the cumulative supply pressure on the market.”

The analyst also sheds light on the dynamics of venture capital (VC) investments in the crypto space, noting that the largest quarter of VC funding peaked at $12 billion in the first quarter of 2022, just when the market began to develop. become bearish. Deutscher criticizes the timing and strategy of venture capital firms, suggesting that while their injection of capital is essential to the development of projects, it often leads to imbalances in the market.

“Venture capital firms, like retail investors, are opportunists. Their investment timing is often aimed at maximizing returns rather than supporting sustainable project growth, thereby contributing to cyclical ups and downs in the market,” says Deutscher. He continues to discuss subsequent market effects, where projects delay launch under unfavorable conditions, only to eventually flood the market when sentiment reverses, thus worsening dilution.

The constant introduction of new tokens not only strains market liquidity but also affects investor confidence, especially retail investors. Deutscher points out: “The focus on private markets is one of the biggest and most damaging problems in crypto, especially compared to other markets like stocks and real estate. »

This environment creates a barrier to entry of new liquidity and leaves retail investors feeling marginalized, a feeling exacerbated by high-profile investors. failures like LUNA And FTX. Deutscher says: “If retail investors feel like they can’t win, they won’t play the game, which is why memes have dominated this year – it’s the only meta where retail feels like they can. have a fighting chance. »

Looking ahead, Deutscher suggests several strategies to mitigate these issues. Exchanges could enforce better token distribution standards and prioritize larger community allocations. Additionally, adjusting the percentage of tokens unlocked at launch could help manage selling pressure more effectively.

“Even if insiders don’t force change, the market will eventually,” says Deutscher. It suggests that stock exchanges should adopt rigorous standards for listing new projects and be equally strict in delisting those that do not meet existing criteria, thereby preserving the integrity and liquidity of the market.

In his closing speech, Miles Deutscher hopes his ideas will promote greater understanding and prompt a re-evaluation of current practices. “Dispersion is not the only problem, but it is certainly a major problem and something that needs to be discussed more openly to foster a healthier crypto ecosystem.”

At press time, Ethereum (ETH) was trading at $3,562.

Ethereum Price Ether Price Holds Above 0.618 Fib Level, 1-Week Chart | Source: ETHUSD on TradingView.com

Featured image from Shutterstock, chart from TradingView.com

Fuente

Up Next

$440 million lost in Altcoin liquidations

Don't Miss

Expert Predicts Altcoin Market Crash, Suggests Optimal Buy Points for Top 10 Cryptocurrencies

CoinFlix Staff

We are the editorial team of CoinFlix, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on CoinFlix, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

Click to comment

Altcoins

Long-Term Impact of Ethereum ETF on Cryptocurrency Market

Published

6 months ago

29 July, 2024

CoinFlix Staff

Long-Term Impact of Ethereum ETF on Cryptocurrency Market

Popular crypto analyst Michael van de Poppe has highlighted his altcoin portfolio approach in light of the new Ethereum ETF. In a recent Youtube videoThe analyst explained the measures he would take for this major market event.

The Ethereum ETF was listed on the stock exchange and it took time to get approval and so far there has been no significant change in price. The analyst pointed out that the long-term effect could be quite significant, comparing it to the situation of the Bitcoin ETF where the initial decline was followed by large inflows.

According to Van de Poppe, the Ethereum ETF’s trading volume on the first day of trading was about 25% of the volume Bitcoin ETF He noted that the first day of trading was marked by low inflation, and said there was a net inflow of $150 million to $160 million, which reduced the available supply.

Altcoins are poised for growth

The analyst said that as Ethereum adoption increases in the future, the supply of Ethereum will decrease, which is a deflationary model. Ethereum is up about 15% since the ETF approval, the broader market reaction has yet to happen as several sell-offs have taken place, including the Grayscale Trust.

Van de Poppe also mentioned other important market events, including the end of Mount Gox The process of repaying creditors initially caused tensions in the markets, but had little effect subsequently. It also highlighted the role of macroeconomic factors, which can lead to Fed rate cuts, which can affect markets.

In this regard, looking at van de Poppe’s strategy, he is still keen to trade within the altcoins of the Ethereum ecosystem. He stated that there is a possibility of short-term price fluctuations that may discourage many people, but the long-term still looks good due to the improvement and adaptation that has been made to Ethereum and its environment.

According to the analyst, substantial inflows could propel Ethereum towards new historic highs with estimates ranging from $5,000 to $7,000. Despite the current market fluctuations, he is confident that macroeconomic changes and greater liquidity will be favorable for altcoins.

He explained that his broad approach to altcoins, especially those associated with Ethereum, will be beneficial because the market will react differently to these events. The basis for his optimism comes from the fact that he believes that Ethereum and all associated projects are still extremely undervalued and have the potential to skyrocket as sentiment changes.

Looking ahead and market adjustments regarding the Ethereum ETF and other macroeconomic factors, the analyst remains bullish on altcoins. He suggested investors stay informed and believe that in the ever-changing world of crypto, they will eventually be rewarded.

Fuente

Altcoins

Altcoins Are Severely Undervalued, Awaiting Ethereum Move | Flash News Detail

Published

6 months ago

28 July, 2024

CoinFlix Staff

IntoTheBlock Releases Report on Institutional DeFi Trilemma

Disclaimer

Disclaimer: Blockchain.news provides content for informational purposes only. Under no circumstances shall blockchain.news be liable for any direct, indirect, incidental or consequential damages arising out of the use of, or inability to use, the information provided. This includes, but is not limited to, any loss or damage resulting from decisions made based on the content. Readers should conduct their own research and consult professionals before making any financial decisions.

Fuente

Altcoins

Altcoins Correct Amid ETH Decline, Grayscale Outflows | Flash News Detail

Published

6 months ago

28 July, 2024

CoinFlix Staff

Disclaimer

Fuente

Altcoins

Epic Altcoin Rally Expected for August and September

Published

6 months ago

28 July, 2024

CoinFlix Staff

Crypto analyst predicts massive altcoin rally similar to Q1 2024, urging patience and accumulation.
Bitcoin’s potential as a reserve asset and its technical patterns suggest that it will drive the rise of the cryptocurrency market.

Captain Faibik, a renowned crypto analyst, has created excitement in the cryptocurrency sector with his latest prediction. He indicated that we are on the cusp of a massive altcoin rally, similar to the one we saw in Q1 2024.

We are on the verge of a massive Altcoin rally, similar to Q1 2024📈

Keep accumulating and hold with patience. (Patience will be rewarded)

The majority of #Altcoins have already hit rock bottom and are about to escape.

In my opinion, August-September is going to be epic for Altcoins.🚀🚀#Crypto pic.twitter.com/cMdHagiaYc

— Captain Faibik (@CryptoFaibik) July 24, 2024

Accumulating and Holding Altcoins: The Path to Potential Profits

He stressed the need to accumulate altcoins and hold them patiently, as it will eventually pay off. According to him, the majority of altcoins have already bottomed out and are about to break it. He believes August and September will be epic months for altcoins.

In a chart posted by Captain Faibik, the overall crypto market cap, excluding Bitcoin and Ether, known as TOTAL3, is approaching the upper boundary of a descending channel pattern.

This context suggests a potential breakout and a significant rally towards the $1 trillion mark. Technically, the decline since mid-March is interpreted as a corrective trend for the value of TOTAL3, signaling a preparation to enter a rally structure.

Bitcoin’s influence and legislative developments suggest good prospects for the future

Furthermore, based on sentiment and technical patterns, Bitcoin, the world’s leading cryptocurrency, appears poised to lead the charge in the cryptocurrency market. Bitcoin’s performance often sets the tone for the market as a whole, and a strong move in BTC could trigger a significant rally in altcoins.

Previously, as we have already said reportedSenator Cynthia Lummis said she plans to introduce a bill at the upcoming Bitcoin conference that would require the Federal Reserve to hold Bitcoin as a reserve asset.

If this law passes, the US will treat BTC as a long-term investment rather than selling huge amounts infrequently, which could disrupt the market.

In addition, asset management firm VanEck has proposed a bold scenario in which Bitcoin Price Could Reach $2.9 Million Per BTC By 2050based on its fundamental outlook. Matthew Sigel, head of digital assets at VanEck, and senior investment analyst Patrick Bush noted that their estimate is based on Bitcoin’s adoption as a global medium of exchange and reserve asset.

As Bitcoin price increases, altcoins are expected to gain popularity, indicating the start of a bullish rally shortly after the BTC halving event.

Meanwhile, at the time of writing, the price of BTC was hovering around $67,007.99up 4.67% over the past 24 hours following a short-term correction.