A US hedge fund and investment firm specializing in digital assets says today’s crypto bull market is different from the bull run of three years ago.
In a new blog post, Pantera Capital liquid strategies portfolio manager Cosmo Jiang and head of content Erik Lowe talk participation that the 2021 bull run was driven in part by “speculative froth.”
“This rally is remarkably different from the previous ones.
At the peak of 2021, there was massive churn in the top tokens. Fourteen of the top 20 tokens at the height of the 2017 ICO (Initial Coin Offering) lead boom fell out of the top 20 shortly afterwards. They’ve fallen a long way. Thirteen of those fallen tokens now average #123 – by market cap. (Tron is the only project that dropped out of the top 20 and returned.) In retrospect, you can say this was speculative froth and hype about unproductive tokens.”
According to Pantera, the top coins in this year’s bull cycle have a consistency that sets this bull run apart from 2021.
“The fourteen tokens that dropped from the top 20 in 2017 were all replaced by tokens that didn’t even exist at the time of the previous peak. That’s wild. Pure creative destruction.
What was interesting about this rally is how little change there has been. It is the opposite of the previous cycle.
This time, the entire top six – which accounts for 83% of the market capitalization – is the same. Eight of the top 10 are the same. Fourteen tokens remained in the top twenty.”
The digital asset hedge fund points out that there has been only one stronghold throughout market cycles: the dominance of Bitcoin (BTC).
“Throughout all these cycles, Bitcoin has been the constant… In the twelve years since Litecoin launched, only four tokens have held the number 2 position: Litecoin, XRP/Ripple, Ethereum and Bitcoin Cash. Bitcoin Cash only held it for one day! Bitcoin has always had the title role.”
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Generated image: Midjourney