The CEO of blockchain intelligence platform CryptoQuant says a structural shift in Bitcoin (BTC) accumulation is the culprit behind a slowed altseason.
On-chain analyst Ki Young Ju tells According to his 379,400 followers on the social media platform
According to CryptoQuant’s director, altcoins now need to come up with a compelling use case because they can no longer rely on Bitcoin’s momentum to see higher prices.
“Compared to the previous cycle, the nature of capital flowing into Bitcoin has changed. The current Bitcoin rally is mainly driven by demand from institutional investors and spot ETFs (exchange traded funds).
Unlike users of crypto exchanges, institutional investors and ETF buyers are not looking to switch their assets from Bitcoin to altcoins. Furthermore, asset rotation becomes inherently less feasible as they operate outside of crypto exchanges.
Altcoins should focus on developing independent strategies to attract new capital rather than relying on Bitcoin’s momentum.”
Ki Young Ju too notes that the recent explosion in the volume of some altcoins is due to a rise in the liquidity of dollar-pegged crypto assets.
“Altseason is no longer defined by Bitcoin asset rotation.
The increase in altcoin trading volume is not driven by BTC pairs, but by stablecoin and fiat pairs, which reflects real market growth rather than asset rotation.
Stablecoin liquidity better explains altcoin markets.”
The analyst goes on to say that while he is optimistic about altcoins, he thinks that the rising tide will not lift all boats.
“Don’t get me wrong, I am optimistic about altcoins. I’m just pointing out that only a select few are raising new capital. Altcoin season is coming, but it will be for a few people. Not every altcoin will ever reach its previous all-time high.”
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Generated image: Midjourney