Altcoins
This Bitcoin cycle could be the “last gasp” for Altcoins, analyst predicts
The days of making big money on obscure memecoins during a crypto bull run may soon be coming to an end, according to Glassnode senior analyst James Check.
The on-chain markets expert predicted As of Tuesday, a large cohort of younger Bitcoin holders may now hold significant amounts of money and be less willing to bet on riskier assets.
“People are becoming less and less willing to become shitheads because they know they will get there just by sitting still,” Check wrote to Twitter. “Don’t fuck up. They throw in memes here and there, but only to the same extent as they bet on football.
Check argued that the main source of demand for “shitcoins” so far has been “millennial crypto natives,” who are now moving from the “get rich” to the “stay rich” phase of their financial lives .
This theory is supported by numerous surveys showing that ownership and support of cryptocurrencies are over-represented among 18-40 year olds. For example, a Grayscale survey U.S. voter surveys released Tuesday revealed that 62% of Gen Z believe crypto is “the future of finance.”
That said, the analyst believes the investment community has woken up since the last bull market and can separate winners – like Bitcoin – from altcoins that aren’t generating “any serious demand.”
Altcoin holders may therefore struggle to find buyers willing to purchase their largely speculative tokens.
“We may not be far from the last gasp of the alts,” he wrote. “Millennials and Gen Z are asking the next generations to buy their shitcoins, and that’s no different than Baby Boomers asking them to buy overvalued homes.”
However, the analyst’s latest thesis has not yet come to fruition. While Bitcoin rose 50% earlier this year after receiving its own US spot ETFsmemecoins without an explicit use case, including DOGE, SHIB, PEPE, and WIF, rose even stronger.
It’s an oft-repeated phenomenon that Matt Hougan, CIO of Bitwise, has previously described as the “wealth effect”. When long-term Bitcoin holders get richer as demand for BTC increases, they tend to cash in on the profits and feel comfortable using them to play the risk curve.
Since altcoins have a much lower volume and market cap than BTC, it doesn’t take as much money to invest in the assets to significantly increase their price, Hougan observed.
Check itself has frequently drawn attention to the fire-selling engaged in by long-term Bitcoin holders earlier this year, indicating profit-taking behavior reminiscent of many previous bull markets.
In early May, long-term Bitcoin holders appeared to be returning to hodling, needing “higher prices to motivate sales,” according to Check.