There are several key reasons why the altcoin rally may not come as expected or may be delayed:
1. Bitcoin Dominance and the Influence of Institutional Investors:
* The Role of Bitcoin ETFs: The launch of spot Bitcoin ETFs in January 2024 created a safe and regulated gateway for institutional investors. This has led to a large portion of the capital that would have flowed into altcoins in previous cycles being channeled into Bitcoin. While Bitcoin ETFs have seen record inflows, interest in Ethereum ETFs (launched in July 2024) has been more limited than Bitcoin. This suggests that institutional interest is largely focused on Bitcoin and investors have higher faith in Bitcoin.
* Increasing Bitcoin Dominance: Bitcoin’s increasing market dominance (share of total crypto market capitalization) is reducing demand for altcoins. Analysts predict that Bitcoin’s dominance could reach 60% by the end of 2024, or even exceed this level. This situation shows that the liquidity in the market has largely shifted to Bitcoin.
2. Macroeconomic Factors and Market Sentiment:
* Liquidity Decrease: The decrease in liquidity in the general market can restrict the capital flow that will trigger altcoin rallies.
* Global Economic Health and Geopolitical Events: Uncertainties in the global economy, recession expectations or geopolitical events can reduce investors' risk appetite and hinder the growth of the altcoin market.
3. Market Structure and Project Quality:
* Market Oversaturation: The existence of millions of tokens in the market and the launch of new ones every day creates an oversaturation in the altcoin market. This situation leads to the focus of capital on higher quality and solid projects.
* Maturation of Investor Preferences: With the increasing interest of institutional investors, investors are now tending to focus on projects with more solid fundamentals, income-generating models and real-world use cases. This shows that the period of "everything goes up" is over. CryptoQuant CEO Ki Young Ju states that most altcoins may not survive and only projects with strong fundamentals can outperform the overall market.
In summary, the main reasons for the delay in the altcoin rally are that Bitcoin is more preferred by institutional investors, macroeconomic negativity, liquidity crunch in the market, and investors are becoming more selective due to the oversaturation in the altcoin market. Experts state that instead of a general "altcoin season" in 2025, certain altcoins with more solid fundamentals may come to the fore.
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There are several key reasons why the altcoin rally may not come as expected or may be delayed:
1. Bitcoin Dominance and the Influence of Institutional Investors:
* The Role of Bitcoin ETFs: The launch of spot Bitcoin ETFs in January 2024 created a safe and regulated gateway for institutional investors. This has led to a large portion of the capital that would have flowed into altcoins in previous cycles being channeled into Bitcoin. While Bitcoin ETFs have seen record inflows, interest in Ethereum ETFs (launched in July 2024) has been more limited than Bitcoin. This suggests that institutional interest is largely focused on Bitcoin and investors have higher faith in Bitcoin.
* Increasing Bitcoin Dominance: Bitcoin’s increasing market dominance (share of total crypto market capitalization) is reducing demand for altcoins. Analysts predict that Bitcoin’s dominance could reach 60% by the end of 2024, or even exceed this level. This situation shows that the liquidity in the market has largely shifted to Bitcoin.
2. Macroeconomic Factors and Market Sentiment:
* Liquidity Decrease: The decrease in liquidity in the general market can restrict the capital flow that will trigger altcoin rallies.
* Global Economic Health and Geopolitical Events: Uncertainties in the global economy, recession expectations or geopolitical events can reduce investors' risk appetite and hinder the growth of the altcoin market.
3. Market Structure and Project Quality:
* Market Oversaturation: The existence of millions of tokens in the market and the launch of new ones every day creates an oversaturation in the altcoin market. This situation leads to the focus of capital on higher quality and solid projects.
* Maturation of Investor Preferences: With the increasing interest of institutional investors, investors are now tending to focus on projects with more solid fundamentals, income-generating models and real-world use cases. This shows that the period of "everything goes up" is over. CryptoQuant CEO Ki Young Ju states that most altcoins may not survive and only projects with strong fundamentals can outperform the overall market.
In summary, the main reasons for the delay in the altcoin rally are that Bitcoin is more preferred by institutional investors, macroeconomic negativity, liquidity crunch in the market, and investors are becoming more selective due to the oversaturation in the altcoin market. Experts state that instead of a general "altcoin season" in 2025, certain altcoins with more solid fundamentals may come to the fore.