Altcoins will inflate a new bubble, increasing the market capitalization

David Kemp

Coin holders and bidders can only rely on the success of the assumption. Today, the market capitalization of cryptocurrencies is about $ 200 billion, and according to Cowan, 50-fold growth is planned.

Dan Morehead, head of Pantera Capital, echoed the analysis. Its figures are even higher, amounting to 40 trillion. total capitalization dollars. Morehead did not say what they were based on, while Benjamin Cowan gave a detailed explanation of his words:

Right now, investors can invest in altcoins, getting a 300-fold profit. Under the most modest scenario, the market will grow to 11 trillion., and if the bull dynamics are even more persistent, the capitalization indicator will reach 32 trillion. dollars'.

Growth is planned to be uneven. Some assets will grow, others will disappear into nowhere. This is a common danger of violas, from which none of the holders is immune. The price chart is most eloquent. Even the closest competitors of bitcoin from the TOP 10 cryptocurrencies are significantly reduced in value relative to it.

For example:

  1. At the peak of the price, Ethereum reached 0.15 BTC. This was in January 2018 on the wave of General euphoria.
  2. Then the ether collapsed along with the entire market, sliding in April to 0.05 BTC. 
  3. This was followed by a positive trend and the rate doubled to 0.1 BTC by may. It did not hold at this level, falling to 0.012 by the winter of 2018 – 2019.
  4. A brief Renaissance of growth to 0.04 by the summer of 2019, was replaced by a new fall and now ETH is given about 0.017 BTC.

Ethereum is taken for illustration. It shows how volatile the market situation is and how dangerous it is to invest in Altos without risk insurance. The analyst also predicts rapid growth for bitcoin itself. The price will reach $ 140,000, and the dominance index will drop from the current 70% to 23%.

Cowan warns that his calculations are not a direct investment recommendation. This is no more than one of the scenarios. The key point is the ratio of BTC and altcoins and the rapid growth of the latter.

Alternative opinion

While sharing optimism about market growth, other experts disagree with Cohen. For example, the CEO of Ripple, whose investments amounted to $ 200 million, and the capitalization reached 10 billion, Brad Garlinghouse also made a forecast for 2020. Predicting the withdrawal of about 95% of altcoins from the market. The consolidation of digital assets will affect about 3,000 coins and tokens. They are not provided with anything and are not useful, representing an exclusively speculative product.

Only violas that have a real application, i.e. those that are involved in some everyday sphere, will survive. There is a chance for coins that are in market demand. In total, there are about 6.5 thousand cryptocurrencies in operation today, and this number is considered excessive.

These forecasts are based on a constant increase in the bitcoin dominance index. Today, it is 71%. For comparison, the lowest figures (in the winter of 2018) were 38%. Starting from may 2019 (50% dominance) and up to the present moment, BTC indicators are only growing. Factors that would indicate the surrender of positions are not observed.

The head of the Binance exchange, Changpeng Zhao, believes that the capitalization of the cryptocurrency market will grow in 2020. His expectations are based not on the altcoin bubble and speculation on them, but on the integration of digital currencies into state economies. The Central banks of most countries are showing interest, and Blockchain is being implemented everywhere in public administration and financial structures. Recently, the importance of the network was noted by the Chinese President, adding an argument in favor of digitalization of economies.

Following the growth of trust, institutional investments get their hands on cryptocurrency, which the owner of Binance is also sure of. Banks and corporations will officially enter the game, similar to the stock market. At the same time, this will limit the freedom with which the crypt is inextricably associated. Bitcoin, followed by Altos, emerged as an alternative to financial markets, access to which for ordinary citizens was (and remains) limited. Standardization will inevitably squeeze out most of them.

Already, many exchanges and platforms require proof of identity, calling into question the main advantage of cryptocurrency – anonymity.

To buy or not to buy

Given the variety (and difference) of forecasts, the main question is how to buy or not to buy altcoins. It can be expanded by stating as: to get the tokens or not?

The answer is unequivocal -Yes.

You can't go far on just bitcoin. Even if it grows to sky-high heights, x100 or even x300 as promised by Benjamin Cowan, you will not make it. Among the altocins, even with the most unfavorable outcome, there are always coins that will shoot and will remind you about already forgotten phrase «to the moon».

What should I pay attention to when buying?

  1. Always keep in mind the market situation. Follow news, track forums and discussions. Often, you will be able to find important pieces of information. 
  2. Get acquainted with a specific token. What is it, what goal is it pursuing, who is part of the team, what is the degree of trust in the product;
  3. To estimate the volume of trades. A key indicator, if the traded mass is growing, then the token is in demand. It is better to use a large time interval, so as not to run into a one-day pump;
  4. Get altcoins in another way.  Do not forget about bountry and airdrops. 

The last point should be discussed in more detail. At one time, ETH, Ripple, and BnB were distributed for free in an amount sufficient for the current owner to have a financial cushion of several tens of thousands of dollars. Definately use chances to get new coins, especially if they are promising altcoins (Durov and Zuckerberg have not yet entered the market).

In summary, there are grounds for optimism, but caution does not hurt. You should add a few altcoins to your portfolio, constantly analyzing the market and not forgetting the magic power of stop loss.