With Bitcoin setting new all-time highs, 2024 marks a significant year for crypto. This increase has spotlighted Bitcoin worldwide and also raised questions about the potential effects on altcoins within the markets. With the introduction of Spot Bitcoin ETFs and the 2024 Bitcoin Halving capturing Wall Street's interest, experts are suggesting that Bitcoin's climb is far from over.
But are altcoins set to follow this path as well?
Why Altcoins May Follow Bitcoin
The question of whether altcoins follow Bitcoin's price movements is a topic of interest among experts and analysts. Diving into both historical trends can provide insights into this relationship.
Let's take a closer look.
Historical Performance
2015-2018: Altcoins & ICO Mania
Between 2015 and 2017, Bitcoin experienced significant growth which captured global attention. This was soon followed by a surge in altcoins, particularly highlighted by the Initial Coin Offering (ICO) craze from 2017 to 2018. This period demonstrated a clear phase of transition, where Bitcoin's dominance initially paved the way for the altcoin market to overshadow it, in what many referred to as the start of "altcoin season".
2019-2021: The DeFi Boom
During this period, influenced by the global pandemic, central banks injected large sums of money into the global economy. This coincided with Bitcoin's 3rd Halving in May 2020, leading to a significant price increase. Also, this later fueled interest in the decentralized finance (DeFi) sector, setting the stage for another altcoin season. The market mirrored the 2015-2019 cycle, with Bitcoin initially leading in performance, followed by a surge in altcoin prominence.
Take a look at the graph below and see how altcoins performed at the end of each bull run cycle.
As you can see, historically after Bitcoin performs well during the bull run, altcoins tend to follow its trend.
More Crypto Backed ETFs
After the Spot Bitcoin ETF was approved by the SEC, the approval of the Spot Ethereum ETF has been making headlines. A similar scenario to that of the Spot Bitcoin ETF could happen for the Ethereum ETF where major financial institutions would purchase large amounts of ETH to back their ETFs, leading to increased demand and reduced supply. We could potentially see the price for ETH set new highs. The introduction of the first altcoin-based ETF could pave the way for other altcoin ETFs.
Altcoins Demand & Appeal
There are thousands of altcoins, each with its own purpose and appeal, much like stocks in the traditional financial market. Each altcoin's unique qualities can attract a large number of buyers, potentially driving up an altcoin's price. As altcoins gain traction, their distinct appeal to various investors may influence their value.
Is Altcoin Season Approaching?
With all these trends in place, it seems that altcoin season may come to the markets soon and investors are particularly excited for the opportunity. This year itself, Bitcoin surpassed its previous all-time high from 2021, which is a significant milestone for the crypto markets. It appears as if we’re in the first phase of the bull run, signalling continued growth for not only Bitcoin but altcoins as well.
While past performance of any digital asset is not an indication of future results, crypto investors appear to be watching carefully, with some gearing up, leading to a potential surge in buying activity. At iTrustCapital you can buy and sell altcoins 24/7 365 in a tax-advantaged Crypto IRA. For those interested in buying and selling altcoins, iTrustCapital invites you to sign up and start today.
Click here to open an account!
DISCLAIMER
This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.
iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.
Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.
Some taxes and conditions may apply depending on the type of IRA account. Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional.
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