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In the last third of the bullish cryptocurrency market rally, altcoins have historically outperformed Bitcoin. Pantera Capital experts came to this conclusion.
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With a momentous onset to the year, we believe there is still a ton to look forward to in 2024.
In this month’s letter, we discuss:
— Predictions for 2024
— Crypto correlations within bull cycles
— State of blockchain venture
— The potential of AIxWeb3https://t.co/kq92Qneie3— Pantera Capital (@PanteraCapital) January 16, 2024
After analyzing the two previous cycles of market expansion, they found that in the first phase, the share of altcoins in market capitalization was declining. This indicates the accelerated growth of digital gold. But at about 60-70% of the duration of the rally, Bitcoin lost the lead.
Data: Pantera Capital.
Analysts have calculated the actual contribution to the overall growth of the total capitalization of Bitcoin and other cryptocurrencies. According to their estimates, in 2023 the market was in the first phase of the rally. At the moment, digital gold has grown by 2.8 times, and the rest of the market by 1.7.
Data: Pantera Capital.
“While one of the highest sources of alpha has historically resulted from a well-timed move from Bitcoin to altcoins at the start of Phase 2, this relationship will not necessarily always hold, and the timing of this reversal is not an ideal reality for any trader,” the analysts cautioned.
They explained the superiority of digital gold in terms of profitability at the first stage by a number of factors. First, it is the most liquid and widely offered asset.
Secondly, beginners first of all pay attention to the first cryptocurrency. This is due to the fact that over 15 years of operation, Bitcoin has in many ways become a brand for the entire industry.
In the next phase, some investors are starting to look for higher growth tokens underlying different use cases. In 2017-2018 these were assets associated with ICOs, and in 2020-2021 – with DeFi and NFTs.
“Our thesis is that altcoins that underpin protocols that are product market compliant and generate real revenue with strong unit economics will perform best in the upcoming cycle,” the experts emphasized.
In their opinion, in the long term, the choice of tokens will be of paramount importance for investors, since outpacing growth can be expected in some specific sectors.
Let us remind you that against the backdrop of the Bitcoin price subsiding to $42,000 after the launch of spot ETFs, altcoins began to show positive dynamics.
According to the forecasts of the head of research at ETC Group, Andre Dragos, and QCP Capital specialists, in 2024 Ethereum will overtake the first cryptocurrency in terms of growth.
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2024-01-19 13:57:07
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