With Bitcoin taking a breather after hitting an all-time high of $90,000, investors’ attention is turning to altcoins (virtual assets other than Bitcoin). This is a ‘learning effect’ resulting from the repeated rise of major altcoins such as Ethereum and Solana after Bitcoin rose first during the past virtual asset rise. In particular, expectations that various altcoin spot exchange-traded funds (ETFs) may be launched in the United States are stimulating investor sentiment.
As of 3 p.m. on the 13th, Bitcoin was traded at $86,634, down 2% from the previous day, according to CoinMarketCap. Bitcoin, which continued its upward trend by breaking new highs every day, fell slightly after breaking through $90,000. At the same time, Ethereum also fell 5.77% from the previous day to $3,141, and Solana fell 5.98% to $204.79.
However, if you look at the recent trends of altcoins, the upward trend is healthy. In particular, the upward trend of Ethereum and Solana is notable. Ethereum’s increase in the past week was 21%, which was higher than Bitcoin (16%). Solana, ranked 4th in market capitalization, also rose 11% in the past week.
CoinMarketCap’s altcoin season index recorded 39 points, up 4 points from the previous day. The altcoin season season index is compiled by comparing the price fluctuation rates of the top 100 altcoins (excluding stablecoins, etc.) by market capitalization and Bitcoin over the past 90 days. The closer it gets to 100 points, the higher the altcoin rise rate is than Bitcoin. The rise in the altcoin season index means that the liquidity of the virtual asset market is gradually moving from Bitcoin to altcoins. Wonjun Lee, Senior Consultant at Dispread, said, “So far, in the virtual asset cycle, Bitcoin has often risen first, followed by major altcoins, and funds have been circulating.” “There is a prediction that altcoins will see a bigger rise than Bitcoin,” he said.
Expectations for fund inflow into Ethereum and Solana ETFs are also high. According to Citigroup, net inflow into the Ethereum spot ETF in the two days following the U.S. presidential election reached $132 million. This is the largest amount since the Ethereum spot ETF was launched in July this year. Considering that the popularity of the Ethereum spot ETF was lower than that of the Bitcoin spot ETF not long ago, some predict that the undervaluation of Ethereum will be resolved in the future. Solina plummeted to the $12 level after the bankruptcy of FTX, an American virtual asset exchange, in 2022, but soared 17 times over two years. Expectations are also growing that the Solana spot ETF will be launched following the Bitcoin and Ethereum spot ETF. The prevailing expectation is that US President-elect Donald Trump will provide strength. Standard Chartered analyst Jeffrey Kendrick predicted, “With Trump’s presidential election victory, the price of Solana could rise fivefold by the end of 2025.” In addition, meme coins issued based on Solana, such as Bonk and Cat in a Dog’s World, are also gaining popularity, and the influence of the Solana ecosystem is expanding.
However, there are also predictions that it will be difficult for an upward trend similar to the past to be repeated this time. Some believe that the virtual asset market is overheated. Consultant Wonjun Lee said, “Compared to past cases, meme coins are receiving more attention in this bull market, so it seems difficult to expect the previous cycle to occur.” There is a possibility that liquidity will flow to memecoins, which are relatively small in size, rather than to altcoins with high market capitalization, which are already expensive.
