The post Analysts Discuss the Risks of Buying Altcoins Today appeared on BitcoinEthereumNews.com.

The cryptocurrency market has seen significant changes, leading many analysts to caution against investing in altcoins. Historically, bull markets have seen Bitcoin and Ethereum rise first, followed by altcoins. However, current conditions suggest a shift in this pattern. Why Buying Altcoins Now Is Risky Quinn Thompson, founder of the crypto hedge fund Lekker Capital, advised against investing in altcoins at this time. He pointed to several indicators of market instability, including high leverage and open interest, a lack of panic-driven buying, and stagnant stablecoin supply. He believes the market is experiencing increased selling pressure, particularly from venture capital funds needing to raise capital, which leads to more selling than buying. This situation, combined with low summer trading volumes, makes it difficult for altcoins to gain traction. “I think there is serious cascade risk in crypto, and in particular, expect most altcoins to be taken out back. The market seems to have lost any ability to bounce, even in majors, while at the same time, leverage and open interest remains high,” Thompson said. Altcoins Market Depth. Source: Kaiko Thompson identified two primary reasons for his stance. First, the impact of Bitcoin and Ethereum exchange-traded funds (ETFs) and the issue of altcoin supply inflation. The introduction of Bitcoin and Ethereum ETFs has changed the market structure. In the past, capital would flow from major cryptocurrencies like Bitcoin and Ethereum into altcoins during bull markets. However, with over $50 billion now invested in Bitcoin ETFs, these funds do not have similar mechanisms for investing in altcoins. This shift has limited the capital available to altcoins, making it harder for them to rise in value. According to Samara Epstein Cohen, Chief Investment Officer of ETF at BlackRock, traditional market participants increasingly focus on Ethereum for tokenization, which further sidelines altcoins. Read more: How To Invest…

---

Filed under: News - @ June 16, 2024 2:10 pm