How much in the short term could altcoins have?
During the previous bull markets, the total market capitalization of altcoins (i.e. cryptocurrencies other than bitcoin) went from the new top of all time to a new summit of all time. For the moment, however, one cannot say the same of the current Haussier market, even with Ethereum jumping almost 50% in July and more than 20% in August. Currently, most Altcoins are still means of their historical heights of all time.
If this cycle finally takes place in a similar way to the previous ones, Altcoins could still have room to run. A potential catalyst for prices to increase in the coming months could be their increasing use cases. Most stablecoins, for example, are built on altcoin blockchains and have seen a wave of popularity. The increase in the use of stables could help increase the values of these altcoins.
“An increasing number of blockchain transactions – 60% – now involve Stablecoin transactions, which is up 35% just a few years ago,” explains Martha Reyes, Fidelity Digital Assets® research analyst. “And the market capitalization of Stablecoins has increased by more than 60% in the past year. We also see banks, retailers and payment companies that are involved and are starting to allow Stablecoins on their payment rails. Billions of dollars are now transgrated via corners of corners each year, on surprise, even some of the payment processor volumes. ”
Reyes believes that we are just starting to see the adoption of real use cases for blockchain applications, which could be beneficial for the values of the respective altcoins of these applications. “As such, there are reasons to think that altcoins have more room to run.”
However, do not forget that historically, altcoins have also had a considerably higher probability of harming your wallet if things happen to the south. When Bitcoin fell 30% during his decline in January, Ethereum dropped by more than 66% and many smaller altcoins dropped even more.
“You may have the possibility of more important gains, but there will probably be much more risks that accompany him,” explains Kuiper. “And if you look at the best parts a few years ago by market capitalization, some do not even exist today.”
