Amid a significant rise in crypto prices, altcoins have begun to outperform Bitcoin (BTC), marking a significant turnaround from the 2021 all-time high. This rise coincides with Bitcoin’s close. The highest level of $100,000Buoyed by the presidential election victory of Donald Trump, who positions himself as a pro-crypto leader.
However, Bloomberg Reports That uncertainty stemming from the 2021 crypto collapse remains evident among investors, as many altcoins have experienced dramatic price fluctuations during past market cycles.
Experts voiced skepticism on Altcoins rally
Altcoins have shown impressive gains, with tokens like Solana (SOL) reaching new all-time highs, while many others have more than doubled in price since the start of the year.
Historically, altcoins have outperformed Bitcoin During market rallies, but can also experience sharp declines during downturns due to their high volatility and low trading volume.
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The crypto market is cautious after the collapse of major players such as FTX and crypto lender Celsius, which contributed to a significant bear market. Despite this, recent activity indicates a resurgence, with increased trading volume and price increases in altcoins during November.
Interestingly, James Butterfill, head of research at CoinShares, expressed skepticism about a massive altcoin rally, especially in light of potential regulatory changes including the proposed national bitcoin reserve.
Republican Senator Cynthia Loomis has introduced The Bitcoin Actwhich seeks to allocate funds from the Federal Reserve’s gold reserves to acquire a strategic reserve of 1 million Bitcoins.
Butterfill told Bloomberg that the political implications of such legislation could significantly affect market dynamics, potentially increasing bitcoin’s dominance over its peers.
Expectations of ETF approval could boost crypto interest under Trump
While Solana stands as the only major altcoin to surpass its previous highs this year, experts like Nikolay Karpenko of crypto trading firm B2C2 believe that this rally may be different from the 2021 experience.
The expert highlighted the industry’s maturation over the past few years, which has seen improvements in risk management and the entry of “more strategic” and institutional investors into the crypto space.
As altcoins continue to gain traction, the data shows this Trade volume There has been a sharp concentration among the five most traded altcoins, rising from less than 50% earlier this year to more than 60% this month.
This shift can be attributed to unique factors affecting individual cryptocurrencies, such as Solana’s growth fueled by excitement over potential. Exchange Traded Fund (ETF) approvals and Dogecoin’s benefits relate to its payment capabilities and support from figures like Elon Musk and his new position at the Department of Government Efficiency (DOGE).
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The expert noted that this could further increase the chances of more altcoins receiving approval for ETFs under the Trump administration. Institutional interest. However, Butterfly cautioned that the market may begin to differentiate between assets, focusing more on fundamentals rather than riding the wave of speculative trading.
Despite the bullish sentiment surrounding altcoins, they still trade at significantly lower prices than Bitcoin, Ethereum (ETH), the second-largest cryptocurrency, which is worth only 4% of Bitcoin’s value.
After reaching a new record high of $263 during last week’s rally, Solana has returned to the $240 level, echoing the current correction experienced after Bitcoin hit a new all-time high of $99,500. is doing At the time of writing, SOL is up nearly 6% in the 24-hour period, while BTC is up 4% in the same period.
Cover image from Dall-E, chart from Tradingview
