Is the big Altcoin a thing of the past again? Analysts weigh in

The cryptocurrency market, renowned for its volatility and high-stakes nature, has always held a particular fascination with altcoins. These assets emerge in the shadow of Bitcoin [BTC], offered the allure of massive returns. Bitcoin, for example, saw a slight decline and was trading at $65,700. However, recent market trends indicate that the era of altcoin gains may be coming to an end.

Altcoin prospects in decline

Altcoins are increasingly perceived as high-risk investments with increasingly limited chances of achieving significant returns. Markus Thielen, head of research at 10xResearch, captures a widespread opinion among crypto analysts. He said:

“While tactical opportunities exist, the era of 100x returns may be behind us.”

This skepticism about the current dynamics of the altcoin market is widely shared within the community. Thielen points out that the expected altcoin bull market has not materialized in any significant way. The lack of substantial retail commitment and the paucity of innovative new projects have reduced the enthusiasm that once drove altcoin investments. He also observes,

“…retail participation remains subdued and few new projects have emerged that fascinate non-crypto-native traders.”

Characteristics of past bull markets

In the past, altcoin bull markets were driven by compelling narratives and substantial capital inflows. These thrive on the promise of blockchain technology revolutionizing traditional financial systems. However, Thielen notes that the current cycle lacks these strong narratives. Tight capital conditions are evident in the low total value locked in decentralized finance [DeFi] projects.

Read also: Cryptocurrency: 3 coins to capitalize on right now for solid gains

High risk perception

Michael van de Poppe, a prominent analyst, reinforces the cautious outlook by highlighting the risks of holding a portfolio heavily weighted towards altcoins. In a recent post on X, the analyst shared his personal experience of significant losses. He added,

“What is the downside to this gamble? It’s relatively huge. At the time of publication, within 1-2 weeks I have already lost around 20% on my overall investment.”

The altcoin market is going through a challenging phase where high-risk bets are becoming less attractive due to the absence of compelling narratives and significant capital inflows.

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