The altcoin rally that suddenly started in December brought the dominance of Bitcoin to a record low, as many digital assets appreciated not only in dollar terms, but against BTC as well. But the previous big rally of altcoins, where all-time highs were reached, unraveled to new lows a few months later.
This time, the dominance of a large group of small assets is growing by the day.
So what are the possible scenarios this time?
1. Bull Market for Everyone.
With the prices of altcoins relatively low, digital assets are still accessible for new buyers. We must remember that despite corrections, the previous crop of altcoins reached and kept new highs over the years. And if cryptocurrencies are here to stay, a new crop of assets may evolve to command higher prices. With the recent spike in altcoin prices, the heft of the whole market increased to $700 billion, with one trillion in sight soon.
2. A Correction and Bear Market.
At least for some altcoins and tokens, the current overheated prices may unravel. The months-long bear market for altcoins last time saw quite a loss of value, and it remains a possibility that the almost vertical rally cannot go on. And some of the gains may actually return to acquiring more Bitcoin, or another more desirable asset.
For some coins, the slide to lower prices is already happening, as the hype came too fast and the asset itself managed to disappoint. There are many reasons for this, but chiefly, a lack of developer talent and long months until a product materializes. Some projects are not much closer to releasing a product, while their price has already grown by leaps.
3. The New Bitcoin.
An intense competition may bring up one or two assets with serious claims on displacing the leading coins. For now, we don’t know which coin would come up with the right package of features to compete with leading coins. But some coins may have a strong enough community to de-couple themselves from Bitcoin and even find different pricing mechanisms. We must remember that Bitcoin had years of price discovery and community-building, and other assets like Monero commanded very low prices just two years ago. So it is possible that there would be several assets evolving in their own ways and gaining prominence.
Read more at:
https://cryptovest.com/news/the-altcoin-rally-what-happens-this-time/
