Altcoins: Beyond Bitcoins: Investors are betting big on altcoins

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Cryptocurrencies have made a comeback, with blue chip tokens leading the way. However, alternative coins have outperformed leaders like Bitcoin and Ethereum over the past week, thanks to a catching rally.

Edul Patel, CEO and co-founder of Mudrex, said the altcoin rally has reduced the dominance of Bitcoin, whose market cap is now 45% of the total crypto market cap. If we take a look at an indicator called the Money Flow Index, we see that the volume and flow of money in most of the best altcoins has increased significantly. This is because of the growth potential of these smaller altcoins.

After the London Hard Fork update, there was a rally in Bitcoin and Ethereum, leading to a breakout for the entire market following prolonged consolidation. Major digital currencies gained 9-12% last week.

On the flip side, altcoins like IoTeX have grown over 320% in the past seven days. Revain and Terra climbed 78% and 62% respectively. Among the popular names, Solana, Axie Infinity, Cadano, XRP and Dogecoin jumped 40-65% during the period.

Sharan Nair, Chief Business Officer at CoinSwitch Kuber, said cryptocurrencies are still at an early stage. There was still huge potential for new incoming coins to have an impact. “Most investors are looking for new coins that they believe will dramatically change the ecosystem and they want to invest in them from the early stages and benefit from it, like what investors have done with bitcoin and ether.” , he added.

Investors flocking to cryptocurrencies for attractive returns have said crypto giants like Bitcoin and Ethereum are running out of steam. This caused the scale of many altcoins in the market cap chart to increase. “Adoption drives demand, which drives up prices significantly,” Patel said. “In the months to come, we would see these little altcoins being adopted along with the market cap.”

For example, Binance Coin and Cardano are now the third and fourth largest cryptocurrencies, respectively. Likewise, Solana is now poised to enter the top 10. Axie Infinity has joined the top 35. “The market appears to be bullish and in general we have seen such a market attract new crypto investors, many of them. are trying to invest more in new parts, ”Nair said.

Market watchers have said investors are now more inclined to favor altcoins, over traditional tokens, as they aim to get into promising and potential new crypto projects quickly. New projects are undervalued and once their potential is exposed, they will attract a lot of people and lead to price increases, CoinSwitchKuber’s Nair said.

Analysts suggested investors were unwilling to put all their eggs in one basket. Cautious investors prefer to diversify their portfolios.

Several retail investors come to the crypto markets for quick wins and only invest in the smallest altcoins, many of which often go down.

Some of the smaller altcoins have attractive prospects as they are adopted by institutional investors and retail investors, Patel said. “The bulk of the investment would continue to be invested in traditional tokens instead of smaller altcoins,” he added.

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