Krisztian Sandor says that many things, such as too many new coins being unlocked, people selling their coins, not enough new money coming into the crypto market, and certain patterns happening simultaneously every year, have caused altcoin prices to fall significantly.
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- Various market factors have caused a sharp decline in altcoin prices.
- Bitcoin and Ethereum remain stable, while smaller cryptocurrencies witness significant drops.
- Decreased liquidity inflows to crypto markets are impacting the value of stablecoins and tokens with upcoming unlocks.
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Altcoin Investors Facing Challenges as Bitcoin and Ether Maintain Strong Positions
Since October, the money in the crypto market has been moving around a lot, which is good for people who invest in the two biggest coins, Bitcoin (BTC) and Ethereum’s Ether (ETH).
But people who invest in smaller coins are not so happy. Right now, the prices are going down a lot. While the prices of BTC and ETH are just 15% below their highest point this year, big coins like Solana (SOL) and Avalanche (AVAX) have gone down 40% to 50% from their highest point in March. Even worse, the prices of Layer-1 coins like SUI and APT have decreased from 60% to 70%.
On June 21, 2024, Andrew Kang said that people who plan to keep their money in coins for many years should not worry. He thinks, “I believe the cycle is over for 99% of adults; hold what makes sense to hold for multi-year/decade investments.”
Altcoins, any digital coins that are not Bitcoin or ether, face some challenges. This is because many people are selling their coins, and not enough new money is being invested in the crypto market.
Also, many altcoins are dealing with the problem of releasing too many new coins, which have been planned for years. Most of these coins are locked up, bought by people who invested early or set aside for things that help the coin’s system, which is why this is happening.
Quinn Thomson, who started a company called Lekker Capital, said that unlike stocks, which always have a steady stream of money coming in from ETF inflows and bond buybacks, crypto, especially altcoins, is facing a steady stream of selling pressure, which means people are selling their coins.
People want less of the smaller, riskier crypto stuff, and not as many people buy and sell them. This means there is insufficient demand to make up for the available amount.
Also, the money coming into crypto markets has slowed down or even reversed recently. This can be seen by the market value of something called stablecoins, which are often used as a middleman for crypto trading.
Patterns that happen at the same time every year also affect smaller tokens. For example, June is usually a bad month for these smaller tokens. This month is no different, with an 11% drop.
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