Altcoin
The main reason why the main Altcoin season will not come
Alex Dovbnja
Murad Mahmudov, a leading financial analyst, argues that a new altcoin season is highly unlikely
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Murad Mahmudov, a prominent financial analyst, is convinced that a great altcoin season is not on the horizon due to the decline in cumulative excess savings of US households.
Second recent data by the Federal Reserve Bank of San Francisco, Americans have now spent their savings. The massive increase in savings in the period between March 2020 and August 2021 was triggered by a huge drop in consumer spending.
According to economists at the San Francisco Fed, excess savings reached its peak in August 2021, exceeding a whopping $2.1 trillion.
Despite the fact that these savings are now largely depleted, the report suggests that a strong labor market could allow spending to continue. That said, recent earnings reports from major companies like Amazon show that consumers are becoming budget-conscious.
Considering that Americans are now more careful about their spending than in 2021, Mahmudov hints that they are unlikely to spend money on risky alternative cryptocurrencies.
“The most you can hope for is an occasional, well-timed spike from a particular flavor-of-the-month star player from the crypto-native PvP moneyball,” he said.
The analyst also highlighted the fact that there is an oversupply of altcoins. “Altcoins are growing in both number and fully diluted aggregate market capitalization with each new token release,” Mahmudov added.
Comparing the current market cycle to that of 2017, the analyst noted that the market was much smaller back then, meaning less capital was needed to make significant gains. Furthermore, it was much more difficult to create new tokens.
About the author
Alex Dovbnja
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience covering everything related to the burgeoning industry, from price analysis to Blockchain disruption. Alex has authored more than 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets; he can be contacted at alex.dovbnya@u.today.