Impact on Altcoins
The recent crypto market shake-up significantly affected altcoins. Out of $1 billion in liquidations, less than half involved Bitcoin. Its market share increased by 1% in a week, reaching 57%.
Bitcoin’s Performance
Since the start of the year, Bitcoin has seen a solid 34% gain. It has outperformed the U.S. stock market, where the S&P 500 index shows a 10.2% increase.
Struggles for Altcoins
But most altcoins in the top 50 have lost nearly all 2024 gains. CryptoQuant analysts released a list showing the worst-performing major altcoins.
New Projects Hit Hard
Projects listed in 2024 suffered even more. Of the 30 coins launched on Binance, only JUP from the decentralized exchange Jupiter, based on Solana, showed growth. JUP increased by 21%, and the total value locked on the platform rose to $600 million in six months. Most other projects dropped over 60%.
Bitcoin’s Dominance and Market Trends
During uncertain times, with the threat of a major recession, altcoin sell-offs and Bitcoin’s market share growth are expected. This reaction seems excessive, but the Federal Reserve still has tools to influence the economy. By September, it will shift monetary policy to “rescue” the economy.
ETF Investors’ Response
Ethereum ETF investors share this view, as they have been buying the dip for two consecutive days. Over Monday and Tuesday, net inflows reached $147 million, the best result since launch. In contrast, Bitcoin ETF inflows remained negative.
Altcoin Season Outlook
Regulatory easing this fall will increase market liquidity, potentially sparking an altcoin season.
