Markets

2.52 Million Altcoins Are Ruining the Future of Crypto

Published

7 months ago

19 June, 2024

2.52 Million Altcoins Have Been Created, But They Are Killing Crypto

A glaring problem in the cryptocurrency market is becoming evident. The proliferation of altcoins, with more than 2.52 million created, is suffocating the industry.

This unprecedented growth of new tokens, while initially a sign of a booming market, now presents significant challenges.

2.52 million new tokens created

In 2020, the crypto market went through a frenzy. Liquidity increased as retail and venture capitalists (VCs) poured money in the industry. VCs, in particular, have invested heavily, contributing to the development of numerous projects.

Will Clemente, co-founder of Reflexivity Research, reflected on how simple the strategy was back then. Investors needed allocate capital to high beta altcoins and enjoy the ride as they outperform Bitcoin.

“In 2020, you get into the risk spectrum, these things will have a higher beta for Bitcoin and you just buy all the vaporware and all these things go up,” Clemente explained.

This trend continued into 2022, when venture capital funding Reached a record US$11.1 billion in the first quarter alone. However, this flood of new capital has led to an unsustainable rise in the number of altcoins.

Venture capital investment in crypto. Source: Proposal book

The number of tokens tripled between 2020 and 2022, but the subsequent bear market was hit hard. High-profile failures such as the LUNA and FTX collapses, caused widespread turbulence in the market. Projects that raised substantial funds chose to postpone their launch, pending more favorable market conditions.

In late 2023, market sentiment improved, triggering an increase in the launch of new altcoins. This resurgence lasted until 2024, with more than one million new tokens introduced since April. Consequently, the total number of altcoins has reached 2.52 million across different blockchains.

“There have been nearly 1 million new cryptographic tokens created in the last month, a number that is 2x the total number ever created on Ethereum from 2015 to 2023,” said Coinbase director Conor Grogan. he said.

See more information: 7 Hot Meme Coins and Altcoins That Are Trending in 2024

New Altcoins by Blockchain New Blockchain Altcoins. Source: Dune

While these numbers may be inflated due to the ease of creating meme coins, the sheer volume of new tokens is impressive.

How Altcoins Are Hurting Crypto

This deluge of new tokens is problematic. The more altcoins flood the market, the greater the accumulated supply pressure will be.

Estimates suggest that an additional $150 million to $200 million worth of new supplies enter the market daily. This constant selling pressure depresses prices, similar to inflation in traditional economies. As more altcoins are created, their value relative to other currencies decreases.

“Think of symbolic dilution as inflation. If the government prints US dollars, this in turn will reduce the purchasing power of the dollar relative to the cost of goods and services. It’s exactly the same thing in crypto,” said crypto analyst Miles Deutscher. explained.

Many of these new tokens have low fully diluted valuations (FDV) and high float, exacerbating supply pressure and dispersion. This environment would be manageable if new liquidity entered the market.

However, with insufficient new capital, the market is left to absorb the constant flow of new tokensleading to price suppression.

See more information: What are the best Altcoins to invest in in June 2024?

Token allocation per project. Source: Token unlocks

This could be one of the reasons why retail investors are reluctant to get involved, feeling at a disadvantage compared to VCs.

In previous cycles, retail investors were able to achieve significant returns. Now, tokens often launch at high valuations, leaving little room for growth, and subsequently bleed as their unlock timelines begin.

“The bias towards the private market is one of the biggest problems in crypto, especially compared to other markets like stocks and real estate. This distortion becomes a problem because retailers feel they cannot win,” said Deutscher concluded.

Resolving this issue requires concerted efforts from multiple stakeholders. Exchanges could implement stricter token distribution rules and project teams could prioritize community allocations. Additionally, higher percentages of tokens could be unlocked at launch, potentially with mechanisms to discourage dumping.

See more information: 10 Best Altcoin Exchanges in 2024

The current market situation reflects the need for greater pragmatism. Exchanges should consider delisting defunct projects to free up liquidity. The goal should be to create a more retail-friendly environment that benefits everyone, including VCs and exchanges.

Disclaimer

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Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

6 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

6 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

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Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

6 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

Source

Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

6 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week