As Bitcoin dominance fades, Crypto 'Altcoin season' returns
Watch out, Bitcoin, there’s a whole new class of contenders seeking to dethrone the king of cryptocurrencies. Smaller, lesser-known tokens are outperforming Bitcoin in another “altcoin season” as the world’s largest digital asset has seen its dominance wane in recent weeks. An index of 100 coins is on pace to outperform Bitcoin for the second straight month, amid surges in Solana, Cardano, Avalanche and others. Meanwhile, many crypto firms are seeing greater client interest for these smaller tokens, with BlockFi last weekend noting a “flip” by its retail clients toward alternative coins.
“They are again outperforming Bitcoin -- they call it alt-season,” said Joseph Hickey, global head of trading at BlockFi. “It’s a momentum asset class. When crypto is running -- and because of the risk premium within the asset class -- it has the trading momentum behind it. When you add layer-1s that have higher beta, that’s where you have 20-30% moves in just a couple of days,” he said, referring to an underlying type of blockchain that competes with Ethereum.
The crypto ecosystem has grown tremendously over the past two years, with all sorts of crypto-centric products seeing booms. New companies were founded during the pandemic period, non-fungible tokens took off in a big way and alternative coins gained new prominence as investors looked to diversify away from just the largest digital tokens.
Bitcoin’s share of the market has fallen to about 40% from 65% at the start 2020, according to CoinMarketCap data.
The term “altcoin season” has been used plenty of times in the past. But, the market is undergoing a revolution, says Russell Starr, CEO and executive chairman of DeFi Technologies, a decentralized finance asset manager.
He likens it
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