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Analysts caution that altcoins now represent a 'relatively huge' risk, with the days of massive returns fading. Markus Thielen of 10xResearch suggests the high-reward era is over as crypto market narratives evolve.
Altcoins Shift to Higher Risk as Massive Gains Fade, Analysts Highlight Evolving Crypto Market Narratives
In the recent report by Cointelegraph, the high-risk, high-reward philosophy of altcoins may be shifting toward the former as massive gains become less possible due to evolving narratives fueling the crypto market, a crucial insight from crypto analysts.
“While tactical opportunities exist, the era of 100x returns may well be behind us,” 10xResearch head of research Markus Thielen told Cointelegraph.
He noted that, while the market is expecting an altcoin bull market this year, "retail participation remains subdued, and few new projects have emerged that captivate non-crypto-native traders."
Thielen stated that previous cryptocurrency bull markets had 'distinctive characteristics' that lured in more money, however, this cycle has seen 'tighter capital ', which refers to [provide a brief explanation of tighter capital in the current cryptocurrency cycle], evidenced by low total value locked and a dearth of venture capital investments.
“Last cycle, the narrative that crypto could supplant traditional financial systems was widely embraced, but this cycle’s narratives are shorter-lived and lack substantial backing,” Thielen added.
Earlier this week, the Solana-based meme coin GameStop (GME) — which has no affiliation with the video game-selling corporation — gained 2,727% in tandem with GameStop's stock price, after trader Keith Gill posted a meme from his "Roaring Kitty" X account for the first time in nearly three years.
Michael van de Poppe Warns of 'Relatively Huge' Risks in Altcoin Investments, Citing Significant Potential Losses
MN trading consulting founder Michael van de Poppe claimed in a May 16 X post that a portfolio mostly comprised of altcoins carries a 'relatively huge' risk, which means [provide a brief explanation of the 'relatively huge' risk associated with a portfolio mostly comprised of altcoins].
“What’s the downside of this bet? It’s relatively huge. At the moment of posting, I’m down around 20% already in a matter of 1-2 weeks on the overall investment.”
Despite the risk, van de Poppe revealed that he recently sold all of his Bitcoin to invest in altcoins, noting that he "can lose 50-80%."
However, crypto investor Fabio Andreatta is skeptical that there will even 'be an alt season ', a term used to describe [provide a brief explanation of alt season and its implications for altcoin investments].
“All you did is increase your risk,” Andreatta said responding to van de Poppe’s X post. “You are very unlikely to outperform Bitcoin. Most altcoins will never reach their ATHs ever again.”
Bitcoin's dominance, or market share relative to the rest of the crypto market, remains stable, indicating a consistent trend of capital flows away from altcoins.
Bitcoin domination is approaching a year-to-date all-time high, currently at 56.05%, up 2.12% in the last 7 days, according to TradingView data.
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